…4 years ago, one of Sam Altman’s mentors, Y Combinator founder Paul Graham, flew from the United Kingdom to San Francisco to give his protégé the boot, according to 3 people familiar with the incident, which has not been previously reported. [but his firing has been, see also Newcomer & WSJ & Bloomberg, fore shadowing; there is no hint of any ‘smoking gun’ in coverage, suggesting that (much like OA) it was an accumulation of incidents; see also the criticism of his Loopt acquisition] Graham had surprised the tech world in 2014 by tapping Altman, then in his 20s, to lead the vaunted Silicon Valley incubator. 5 years later, he flew across the Atlantic with concerns that the company’s president put his own interests ahead of the organization—worries that would be echoed by OpenAI’s board.

Though a revered tactician and chooser of promising start-ups, Altman had developed a reputation for favoring personal priorities over official duties and for an absenteeism that rankled his peers and some of the start-ups he was supposed to nurture, said two of the people, as well as an additional person, all of whom spoke on the condition of anonymity to candidly describe private deliberations. The largest of those priorities was his intense focus on growing OpenAI, which he saw as his life’s mission, one person said.

A separate concern, unrelated to his initial firing, was that Altman personally invested in start-ups he discovered through the incubator using a fund he created with his brother Jack Altman—a kind of double-dipping for personal enrichment that was practiced by other founders and later limited by the organization [limited by Altman, apparently, to their displeasure; a similar recommendation would be made by the OpenAI lawyer investigation].

[Emmett Shear appears to have been on the YC board during the firing; and Jessica Livingstone reportedly (see previous WSJ link) pushed Paul Graham into it.

The weirdness around the YC announcements is because Altman ‘accidentally’ published a wrong blog post: “To smooth his exit, Altman proposed he move from president to chairman. He pre-emptively published a blog post on the firm’s website announcing the change. But the firm’s partnership had never agreed, and the announcement was later scrubbed from the post.” On YC’s public statements about Altman’s firing:

“It was the school of loose management that is all about prioritizing what’s in it for me”, said one of the people…The same qualities have made Altman an unparalleled fundraiser, a consummate negotiator, a powerful leader and an unwanted enemy, winning him champions in former Google chairman Eric Schmidt and Airbnb CEO Brian Chesky. Altman’s ability to inspire fealty from employees and faith in his mission was broadcast across Twitter this past weekend in a flood of heart emojis from OpenAI staffers and in threats from nearly all of the company’s 770-person workforce to quit unless he was reinstated.

“90+% of the employees of OpenAI are saying they would be willing to move to Microsoft because they feel Sam’s been mistreated by a rogue board of directors”, said Ron Conway, a prominent venture capitalist who became friendly with Altman shortly after Altman founded Loopt, a location-based social networking start-up, in 2005. “I’ve never seen this kind of loyalty anywhere.”

But Altman’s personal traits—in particular, the perception that he was too opportunistic even for the go-getter culture of Silicon Valley—have at times led him to alienate some of his closest allies, say 6 people familiar with his time in the tech world.

Many in Silicon Valley laud Altman’s strategic skill sets, including his ability to be a matchmaker among powerful people. People who know him say they have witnessed him pluck fledgling start-up founders, mentor them and make introductions for them that altered their careers…Keith Rabois, a general partner at the Thiel venture firm Founders Fund [which recently invested in OpenAI], said that Altman was one of only 3 people he consulted when he decided to leave his previous job to join his current firm. He said Altman, who officiated his wedding, had an uncanny knack for giving strategic advice, for negotiating business deals and for spotting undiscovered talent. “He could tell right away who was destined for greatness—probably one of the 5 best people in all of Silicon Valley at doing that”, he said. “Insofar as he is polarizing, it’s because he is young, successful and ambitious, and people are envious”, he added…Rabois noted that Altman, as a Stanford dropout, persuaded a major telecommunications company to do business with his start-up Loopt [by faking their employee headcount]—the same quality, he said, that enabled Altman to persuade Microsoft to invest in OpenAI.

…a person familiar with the board’s proceedings said the group’s vote was rooted in worries he was trying to avoid any checks on his power at the company—a trait evidenced by his unwillingness to entertain any board makeup that wasn’t heavily skewed in his favor…Altman’s practice of filling the board with allies to gain control is not just common, it’s start-up gospel from venture capitalist Peter Thiel, Altman’s longtime mentor. [See also his attempt to fire Helen Toner from the board.]

…Over the weekend, the 4 members of the original board, including 3 independent directors, had been willing to bring Altman back as CEO and replace themselves as long as Altman agreed to a group that promised meaningful oversight of his activities, according to the person familiar with the board, who spoke on the condition of anonymity to discuss sensitive matters.

Though the board met with and approved of one of Altman’s recommended candidates, Altman was unwilling to talk to anyone he didn’t already know, said the person. By Sunday, it became clear that Altman wanted a board composed of a majority of people who would let him get his way…But by late Tuesday, Altman agreed to certain demands, including not being on the board and retaining Quora CEO and current director Adam D’Angelo, announcing a return as CEO around 10PM Pacific time. He agreed to name two new board members—Bret Taylor, formerly co-CEO of Salesforce and a Twitter board member [ie. Elon Musk loyalist cf. Zilis], as well as Larry Summers, former US treasury secretary—names the old board members were optimistic about.

See Also: