It's not that anyone here (or at least me) thinks he is "bad" in the sense that he is a thief, that he took everyone's money and folded up shop and moved to Maui.
It's that he is woefully inexperienced to be a CEO. His "Wall Street" credentials look good on the surface to those who aren't in the field, but essentially he was a glorified stock broker. So yeah, he has a basic understanding of various securities regulations and whatnot, but it's hardly an MBA-level position that requires demonstrated financial analysis, and more importantly, leadership. At the core, stock brokers are salesmen. And Joey is a fantastic company pitchman.
A few of the rookie mistakes include:
1) Accepting toxic financing. Yeah, it's tempting when you need start up capital but it wrecked the share structure. 125M shares OS isn't too bad for a company that's growing, but when there are only two locations to show for it and you'll need to issue more shares to continue growth, it becomes a bit problematic for existing shareholders as it caps the overall value of each share.
2) Making agreements with various M&A agencies like Pacific and Kiddos. There's a time and a place for these kinds of deals. Best to wait until the company has established a brand. Look at how long it took before CPK ventured into frozen foods. Look how long Gymboree waited until it ventured into clothing. Look how long Disney waited before it created theme parks. Ancillary revenue is wonderful and Parsi is right that opportunities exist, but a more experienced CEO would know that it's all in the timing because you often only get one crack at maximizing these opportunities.
3) Announcing LOIs without being able to execute in a timely manner. While I am glad that Giggles did not enter Tanofran and then be subject to a renovation, Joey should have asked if there were plans to renovate before announcing the LOI. Similarly with Bahrain, don't make a deal and announce it during Ramadan if it's going to create delays.
4) Signing Jillian is helpful because she has a major following and is associated with fitness and health -- put her face on the frozen pizzas and people will buy them. But giving Tia Mowry an equity stake in the company to make a few tweets...ugh. Tia is a fine actress but she isn't really a "star." She doesn't draw crowds to her movies and she certainly isn't going to draw crowds to Giggles because of a tweet. There are a few celebs with that kind of pull -- and Tia unfortunately isn't one of them. If you're going to go after celebrity endorsements, pick the right ones and wait until you have more than two locations at nearly max capacity.
The good news is that Joey has time to learn, and I hope he is relying on Gay and Kaufman to assist with some of the managerial decisions. I know Giggles is his baby, his idea, but there are others around him who have more experience in this field to execute the day to day while Joey does what he does best -- to be a pitchman and sell the brand to investors and customers.
