A few days after we praised the new Better Place electric car pricing model in Israel (a lease plus charge plus 1000 km for $510), the company’s founder and visionary CEO Shai Agassi stepped down, or was ousted as some newer sources would rather say. While company press releases attempt to break the news as a natural transition for a company that goes from start-up stage to business stage, apparently something else was brewing.
At first Agassi wrote in an official statement: “Even though I am not CEO, my heart will always be here at Better Place with absolute identification with the vision, with the wonderful people that have accompanied me on this thrilling and new journey since the days when it was just a dream.”
Yesterday Agassi announced that he would step down from the board, and in parallel the company which is bleeding capital says it is looking for a further $150 million USD in investments.
According to Haaretz Agassi promised his employees that he would never leave the company, but that changed because he apparently had no choice: Agassi was in a dispute with Better Place’s parent company, the Israel Corporation over his recent termination.
Raz at Triple Pundit puts it well:
“Apparently there was a dispute between Israel Corp and Agassi about the next stage of Better Place – Agassi wanted to focus on Europe, Israeli Corp while its Chairman, Idan Ofer (who is also the chairman of Better Place) wanted to focus on China, where the company is already involved in the auto market. As it happens in many disputes of this sort, the stronger side wins and the other side needs to go. The only question left is if Better Place will be a better business as a result of it.”
Will its major shareholders the Israel Corporation pony up the cash to save what could be a lost cause? And how will this news impact car buying confidence? Would you sink your hard earned cash into an electric car that you might not be able to use in a couple of years? Doubt it.
This editorial can explain the back end story of why the Start Up Nation may not be so good at building huge “boring” corporations.
