A mentor of mine is fond of the phrase, “Everything speaks.” This simple, yet profound message basically means that signal is all around us.
And the signal coming out of ecommerce Titan-to-be BeachMint today is one of a senior executive pressing the eject button, both leaving the company and looking to liquidate his holdings in the startup.
I received a tip from an interested suitor that hired-gun chief marketing officer John Volturo was likely on his way out. The brand-building executive has been with BeachMint since its launch in October 2010, having been recruited from celebrity driven, direct-to-consumer pioneer Guthy-Renker (maker of the Proactive skin care line).
A little digging into Volturo’s LinkedIn profile confirmed that the executive, in fact, left the company in late June — which was later coroborated by BeachMint co-founder and CEO Diego Berdakin. In addition to listing his current position as “Founder/CEO, Scriball, Inc.” as of June 2012, Volturo writes:
What am I doing now? I’m getting ready to launch something groundbreaking. Keep watching! What did I do for the past two years? I ran the hottest, sexiest, most-talked about marketing team in Silicon Beach at BeachMint.
Reading between the lines, it seems that something about BeachMint was no longer hot, sexy, or groundbreaking enough to keep Volturo’s attention.
It’s not unnatural for executives at successful, late-stage venture backed companies to catch startup fever and leave to launch their own venture. But it’s far less common for one of the main people tasked with scaling a business to quit just five months after raising a $35 million of Series C financing, and less than two months after launching two entirely new brands and product verticals — intiMint for lingerie and homeMint for housewares. As one senior executive at a more established fashion etailer said to me about the move, “not a great sign for an ecommerce high flyer.”
More damning is evidence that Volturo may be looking to exit some or all of his stock in Beachmint. A quick check of Volturo’s “recent LinkedIn connections” shows that he’s been networking with the team at well known, secondary market investor Millenium Technology Value Partners. The firm describes itself as offering “institutional-quality alternative liquidity programs for companies and shareholders in the venture capital ecosystem.” Millenium participated in BeachMint’s recent Series C, so this wouldn’t be the first time that early insiders (executives or investors) took money off the table.
While it’s possible to argue that Volturo is simply looking to free up some capital for his new venture, conversations with local angel investors who have been pitched on his new company paint a different picture. We hear from multiple sources that he lost faith in BeachMint, and its scattershot brand building strategy, and hopes to cash in his chips while the value is still there.
Volturo’s role at BeachMint covered a wide range of critical functions. From his own LinkedIn subscription, he:
- Lead Brand Identity, Brand Management, Creative Services, Product Development, Public Relations, Merchandising, Talent Deals/Relationships, Offline Customer Acquisition [and] built out team of over 40+
- Launched six exclusive celebrity-driven brands in less than 18 months using customer responses to curate and recommend products
- Grew Facebook community-led build out of F-Commerce.
I was able to speak to an employee in the marketing department at BeachMint who, while wishing to remain anonymous, had the following to say about Volturo’s departure:
The company [recently] became much more individually brand focused and each brand was given its own GM. [John’s] roll changed and I hardly interacted with him. I, and the the majority of the company, have no idea how/why [he left] — he was here one day, and then not the next. Resignations, etc. are kept very hush hush around here, though he was very well liked and there was a reasonable amount of chatter from people who were really bummed to see him go.
BeachMint isn’t the first high-growth subscription commerce company to see an exodus of senior executives. As we reported recently, Shoedazzle has seen a significant shakeup at the top in recent months, with its new CEO aiming to take the business in a new direction with regard to both team and business model. The fact that Volturo doesn’t seem to have been replaced at Beachmint indicates that this move came as a surprise and was less deliberate than in the Shoedazzle case.
“John’s great and he’s on a new journey,” says Berdakin. “[We have] amazing folks joining every day.” Berdakin then informed me that the company hired Greg Steiner as its new chief operating officer. Steiner was the President and COO of eHarmony as recently as March of this year, a position he held since its launch in 2000. The addition of a senior executive of this caliber is a positive sign for the online retailer, although the departure of an early insider speaks somewhat louder.
I’ve pointed out previously that BeachMint is one of a select few extremely well-known companies carrying the torch for the LA startup ecosystem. Deserved or not — I’d argue that there are dozens of large, successful, but less well known venture-backed companies equally deserving of the attention — its success or failure has a dramatic signaling effect on the perceived health and viability of the ecosystem.
As a member of the local startup community and a supporter of entrepreneurs everywhere, I find myself rooting for BeachMint to succeed. It may seem otherwise based on the critical nature of much of the recent coverage of the company — I have even been accused of “hating” Beachmint or members of its founding team.
I’m concerned that the heavily-funded, highly-valued, much-hyped company is precariously positioned atop a very high pedestal. To paraphrase a common saying, it’s lonely and difficult at (or near) the top. The signals coming out of BeachMint these days give me and a number of interested observers reason for pause. Talk is cheap, and results are what matters. I’ll be watching to see where things go from here.