Inside story of Roadstar palace fighting: There was internal strife long ago, and the CTO was publicly "dismissed" when participating in an overseas exhibition

From left to right: Zhou Guang, Tong Xianqiao, Hengliang

Yesterday (January 21), Roadstar.ai (Xingxing Technology), a startup company valued at 3 billion yuan and which once set the highest record for single-round financing in the domestic autonomous driving field, announced the removal of its co-founder and CTO Zhou Guang, which aroused strong attention in the technology and venture capital circles.

This is not the first time that a domestic autonomous driving company has had internal strife, but it is rare that the CEO issues an announcement to dismiss the CTO and the investor then issues a statement refuting the dismissal.

The latest news is: Roadstar.ai will hold an employee meeting today to streamline internal affairs.

This is not the first time that the three co-founders of Roadstar.ai have been fighting. Why has a company that was founded only 20 months ago repeatedly been exposed to management discord? Why has the field of autonomous driving become the hardest hit area for founders to "tear each other apart"?

CEO announces dismissal of CTO, but investors disagree

Let’s first sort out the key points of the removal of Zhou Guang:

Around 10 a.m. on January 21, Roadstar.ai released an announcement on its official account, listing three major violations by its co-founder and CTO Zhou Guang: privately hiding code, falsifying data, and accepting kickbacks:

1. He failed to comply with the company's internal code management rules and regulations for a long time, privately opened the code library and hid the drawings, deliberately did not upload the code and refused to change his ways despite repeated warnings. During a project delivery, his partners discovered that he had used the privately hidden code and documents to forge a technical report, which had a serious impact on the company's reputation and the progress of project delivery;

2. Deliberately falsifying data in a government regulatory report, which was discovered by a third-party agency and had a serious impact on the company's reputation;

3. He took the lead in undermining the company's internal financial rules and regulations, abused his power for personal gain, and used his classmates to receive kickbacks during the A round of financing.

Based on the above three actions, the announcement announced: The company decided to dismiss Zhou Guang from all positions in the company and terminate all employment contracts, effective immediately. The company reserves the right to further pursue legal liability against Zhou Guang. The company's subsequent management and organizational structure will be decided and further notified at the board meeting to be held in the near future.

Co-founder and current CEO Hengliang later forwarded the article on WeChat Moments, adding the caption, "We started a business together, but we met the wrong person. The phoenix is ​​reborn from the ashes and continues to fly high."

Another co-founder and former CEO Tong Xianqiao forwarded the article to the Roadstar.ai media group, saying that he and Hengcheng would accept media interviews at 2 p.m. on the 21st.

Around 7 p.m. on the 21st, a statement signed by "All Investors of Xingxing Technology" was sent to some media outlets. The statement stated that the decision to remove Zhou Guang from his position was detrimental to the core interests of the company and shareholders, and also violated the relevant agreements with investors in terms of procedures, and was not effective. It was recommended that team members fully communicate and resolve differences.

The company structure will be decided by the board of directors later.

After the incident, Looking for Chinese Makers (ID: xjbmaker) contacted Hengliang, Zhou Guang and investors as soon as possible.

Zhou Guang said that he was leading a team to attend the Tokyo Motor Show in Japan and was unaware of the dismissal in China, and neither were the shareholders. The announcement was issued by Hengda after obtaining the WeChat public account.

On the 21st, the PR staff around Zhou Guang said that they would jointly interview investors, shareholders, and all technical TLs on the 22nd to clarify the facts for the media. However, at 11:00 am on the 22nd, the media group originally scheduled for the interview had been disbanded. The staff told Looking for Chinese Makers (ID: xjbmaker): The latest information is subject to the joint announcement of investors, and please wait for official news for follow-up progress.

Roadstar.ai's angel and Series A investors confirmed to Looking for Chinese Makers that the investors were not aware of this in advance, and the rest is subject to the investors' statements.

After the investors issued the statement, will the decision to remove Zhou Guang still take effect? ​​In my opinion, there is so-called "interest transfer" between Zhou Guang and some investors, so "it is not surprising to have such investors to help.

When Looking for Chinese Makers (ID: xjbmaker) asked Hengliang whether the board of directors was aware of the dismissal of Zhou Guang from all positions, Hengliang did not respond directly, but said: "According to our company's articles of association, the CEO has the right to appoint and dismiss the CTO. The investor's statement is invalid, and the board of directors will determine the future management structure of the company.

Hengcheng said that at present, the treatment for Zhou Guang is "dismissal from his position and termination of the labor relationship", and his equity remains unchanged for the time being.

Hengliang confirmed to Find Chinese Makers that the rumors that Zhou Guang secretly hid code, transferred benefits, falsified data during government inspections, and forced employees to write recommendation letters in order to become CEO were all true. However, Hengliang failed to produce relevant evidence.

In response to the above accusations, Zhou Guang’s staff said, “The issue has already involved the legal level.”

Regarding whether the CEO has the right to dismiss the CTO, an investment institution staff member said that it should be determined according to the articles of association of each company or the articles of association of the board of directors. Usually, major events such as adjustments to the company's management personnel and corporate structure need to be confirmed by the board of directors. In this incident, the investor issued a statement saying that "the decision to dismiss Zhou Guang violated the relevant agreement with the investor in terms of procedures." If the investor can show the relevant agreement, it means that the decision to dismiss the CTO will not take effect.

Why are there so many internal conflicts in autonomous driving?

An announcement dealing with Zhou Guang’s disciplinary violations made the internal discord at Roadstar.ai public, but in fact, this kind of drama where the two co-founders teamed up to drive away a third party happened more than once or twice at Roadstar.ai.

Roadstar was founded in Silicon Valley in May 2017. The three co-founders, Tong Xianqiao, Hengliang, and Zhou Guang, were colleagues at Baidu US Research and have worked in the autonomous driving departments of companies such as Google, Tesla, Apple, Nvidia, and Baidu US Research. During his time at Baidu US Research, Tong Xianqiao was the technical leader of the positioning and mapping group, Hengliang was the manager and technical leader of the Sensing group, and Zhou Guang, who had just graduated with a doctorate a few months ago, was responsible for calibration, synchronization, perception, and other aspects.

Multiple sources from the company and investment institutions told Finding Chinese Makers (ID: xjbmaker) that the infighting among the three co-founders first started when co-founder and former CEO Tong Xianqiao and then-VP Na Xiaochuan jointly wanted to oust then-CTO co-founder Hengliang and let Na Xiaochuan take over Hengliang's position, but the directors intervened to quell the matter.

Zhou Guang, who was also a co-founder and then the chief scientist, also wanted to gain greater control of the company and joined hands with Hengcheng to attack Tong Xianqiao. After consideration, the board of directors believed that Roadstar.ai was a technology-oriented company and preferred to keep Zhou Guang, who was more important in technology. Therefore, during the Wuzhen World Internet Conference in November 2018, the management structure of Roadstar.ai changed to Hengcheng as CEO, Zhou Guang as CTO, and the CMO was appointed by the investor, and Tong Xianqiao and Na Xiaochuan were laid off.

According to the source, Zhou Guang's ambition was not just to become CTO, but to become the actual controller of the company, and Hengliang should report to him. Hengliang, who was also unwilling to give up, chose to stand with Tong Xianqiao and Na Xiaochuan this time, and thus the scene of Zhou Guang's dismissal came about.

However, the parties involved did not confirm the above information.

This is not the first time that a domestic autonomous driving company has been involved in internal strife. Jingchi, another leading autonomous driving startup, has also experienced a major management change. In August 2018, one of the co-founders, Pan Sining, sued the company's current CEO Han Xu and others. In order to reduce the subsequent impact, Jingchi had to change its name to "WeRide".

Why do star startups that have just been established so long have so many conflicts? Another domestic self-driving entrepreneur once revealed to Looking for Chinese Makers that the initial equity ratio of the three co-founders of Roadstar.ai was 1:1:1, and the same equity ratio was an important reason for the founders to fight for power.

Some investors, after meeting some self-driving entrepreneurs, believe that most of them are "geniuses" who think highly of themselves and are unwilling to be inferior to others. However, technical geniuses are generally young and lack company management experience.

China's autonomous driving has just started, and there is still a long way to go to achieve L4 level autonomous driving. Only if entrepreneurs invest more energy in research and development rather than competition, will China's autonomous driving have a chance to "overtake on the curve".

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.