Was American Apparel the only Founder-Led Company that’s “Big Out There”?

You may have seen the headlines recently about American Apparel ousting its founder, Dov Charney, as CEO. They certainly had more than enough cause. If you’ve seen any of Charney’s other headlines, it won’t shock you to learn that 1) Dov wasn’t exactly supportive of the board’s decision and 2) Dov was pretty (over) confident in his abilities as CEO. Buzzfeed quotes him, saying:

“Who else is in the founder-led companies that are big out there?”

So we wondered, was Dov Charney right? Are there any other founder-led companies that are “big out there?”

Well, apologies to Dov, but in short… yes. Definitively, yes. Below, we’ve taken five founder-led companies and compared their company’s stock performance to the S&P500.  Take a look, and see just how “big” some other founders have grown their companies during their tenure as CEO.

Founder-Led Companied Out There


Facebook founder-led companies

Facebook only went public a little over two years ago, in May of 2012. However, Mark Zuckerberg’s dorm-room brainchild has grown quite a bit during that time. There was some wariness on the part of investors after FB’s initial offering; shares dropped as low as $18.06 after hitting the market at $42.05. However, Facebook’s stock price went up after their Q2 2013 earnings release, and has outpaced the S&P 500 Index (pictured above in red) ever since.

If this growth continues, perhaps Zuckerberg can set his sights on the impressive longevity of another founder-led company: Oracle.


Oracle founder-led companies

Larry Ellison founded Oracle in 1977 after studying computer design at the University of Chicago (yes, that’s before Mark Zuckerberg was born).  The software corporation went public in 1986 with an IPO of $20.50 and has continued growing ever since.  Since 1986, the S&P500 Index has grown about 800%.   Not too shabby, of course, but Oracle has done just a bit better.  Yes, you are reading that chart correctly, ORCL’s stock has grown over 60-thousand percent.  Hence, Mr. Ellison is one of the wealthiest men in the world… rich enough to buy entire islands, in case you were wondering.

Think Dov Charney would consider that “big?”


Tesla founder-led companies

Like Zuckerberg, Elon Musk, the fascinating co-founder and CEO of Tesla Motors, has also guided his young company to success.  Tesla went public in 2010, and after keeping pace with the S&P 500 Index for its first couple of years in the market, the stock really began to increase in 2013 after they reported $15M in profit on their May 2013 Earnings Call.  The continued increasing demand for their luxury electric cars has helped the stock price continue to increase as well; as of the end of June 2014, TSLA has seen almost 1,200% growth since its IPO.  CEO Musk has a unique interest in manned spaceflight, and in addition to founding Tesla and PayPal, also runs a rocket technology company called SpaceX… so he’s probably used to things “taking off.”


Amazon founder-led companies

Jeff Bezos founded Amazon in 1994, and has served as its CEO since inception.  As you can see from the chart above, he’s done a pretty good job.  In less than 20 years, AMZN’s stock has improved over 20,000%.  That’s…1,000% a year.  Not bad!  I want to note that while the S&P 500 Index looks flat in the graphs above, it did improve as well.  In fact, the Index improved considerably, about 100% since 1998.  Amazon’s growth, like Oracle’s before it, just happens to dwarf the S&P by comparison.  As Bezo’s company continues to evolve from an e-retailer to a player in the device market, their numbers just might continue to go up.



If Dov Charney is taking any solace in the fact that the company he built is essentially firing him, he may be looking at the case of one of history’s most famous founder-CEO’s, Steve Jobs.  Although Jobs co-founded Apple with Steve Wozniak and Ronald Wayne, Jobs’ tenure as CEO is really a tale-of-two-Apples.  His initial run as Chief Executive was wrought with discord, and many felt he exerted too much power in roles as both CEO and Chairman of the Board.  In 1985, things became heated enough that, just as Charney’s Board removed him from his position, Apple’s Board removed Jobs from his post.

Of course, we all know by now that Jobs made a much heralded return to Apple as CEO in September of 1997.  Because many of you are reading this post on an Apple product, you also know that his second tenure in the Executive’s chair went much better than his first.  Take a look at the peak in the chart of AAPL’s stock price above. It might as well be Mount Everest!  Something tells me this is not what the future has in store for Mr. Charney, but dare to dream, Dov, dare to dream.

To Dov’s Point

To be fair, this is an extremely biased set of sample data.  Founder-led companies that fail don’t make headlines nearly as often as founder-led companies that succeed.  And to Charney’s original point, founder-CEO’s are certainly outside the norm.  To that end, some analysts are wary of having the founder serve as CEO; critique-ers would argue that while founders may be creative thinkers, they lack the organizational and management expertise to make great Executives.

However, I think we’ve seen from the examples above that this is certainly not always the case. If the right founder becomes CEO, they can serve as passionate and enthusiastic entrepreneurs-visionaries who think critically about the long term vision of a company rather than the short term bottom line.

So, yes, Dov Charney, there are founder-led companies that are “big out there”. American Apparel just wasn’t one of them.

American Apparel Founder-Led Company

(Notice anything different about American Apparel’s stock price vs. the performance of the stocks above?  That’s right… it went down under Charney’s tenure.)

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