‘I Didn’t Have the Right Face’: Tech CEO Says He Was Forced Out for Acting Like a Tech CEO Despite Not Being White

Last year, when the high-flying Silicon Valley enterprise startup Iterable fired its co-founder and CEO, the company claimed that it was doing so for two reasons. One was that the CEO, Justin Zhu, had been speaking with a reporter at Bloomberg News about unapproved matters. The other was that, two years prior, in an attempt to cope with anxiety and depression, he had taken what he thought was a microdose of LSD ahead of a meeting with a potential investor.

The day the company fired him, Iterable explained the decision in an email, which asserted that Zhu's actions were in violation of Iterable's employee handbook, not consistent with our values," and explicitly against our policies."

In a new lawsuit filed earlier this month against the company, Zhu called that reasoning pretextual and a subterfuge"-a cover, in essence, for the real reason he was fired. In Zhu's telling, Iterable fired him not because of drug use or a news story, but because he didn't look or act like a stereotypical enterprise CEO, and because when his board and investors asked him to fall in line, he called out what he saw it as: discrimination.

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"Justin's employment was terminated because he complained about what he perceived to be illegal discrimination on the basis of his race and national origin, because he requested reasonable accommodation for his disability, and because he is Chinese-American," the lawsuit states.

Iterable, a mobile-focused email marketing platform that counts companies like Zillow and DoorDash among its customers, continues to categorically" deny that Zhu's termination was a result of discrimination of any kind," a company spokesperson told Motherboard. When reached for comment, the spokesperson reiterated what the company said publicly at the time of Zhu's firing: that Zhu was terminated for multiple instances of violating the company's employee handbook, policies, and values."

At its center, Zhu's lawsuit raises questions about the standards by which tech executives are judged. There are innumerable examples of tech CEOs whose slovenly appearance, eccentric or seemingly irrational behavior, and/or open drug use are not just tolerated but celebrated as manifestations of unconventional genius that allows them to think and act outside dominant paradigms for the benefit of investors; these CEOs are mainly, though not exclusively, white men.

Zhu said that his motivations in filing the suit go beyond himself; he hopes, he said, to create awareness about an issue that Asian Americans deal with all the time."

It's clear from his suit and from talking to him that Zhu is particularly bothered by Iterable citing his decision to microdose LSD one time as a reason for his firing.

I never thought they would use that as a reason for my termination given how commonplace LSD is in Silicon Valley," Zhu told Motherboard.

He had done so in 2019, when he was trying to raise money for the company's Series D round. It proved to be a difficult" and challenging" time for Zhu. The company had lost two key executives and a large customer and though the company was growing, it was running out of cash," according to the complaint. He started to struggle with anxiety and depression, which made it hard to sleep. He dealt with chills and heart palpitations, which worsened whenever he heard his phone ring or saw a message from his investors," the complaint states.

After learning about the potential benefits of LSD from a fellow entrepreneur, he tried a small amount, which he hoped would help him and the company. Drug use had long been a part of Silicon Valley lore; tech executives regularly frequent the drug-fueled festival Burning Man, and microdosing has become a popular way to fuel creativity in Silicon Valley. None other than Steve Jobs once described taking LSD as a profound" and important" experience in his life.

But Zhu was more sensitive to the dose than he expected, and it impacted his vision during a meeting with a minor potential investor," the complaint states. (Zhu claims it was the only time he took LSD, which he nevertheless believed effected a positive change to his work life," allowing him to work through the difficulties he faced" as an Asian American CEO and co-founder and further commit to the job.) The episode doesn't seem to have done measurable harm to the company's prospects: During three funding rounds between 2019 and 2021, Iterable raised more than $300 million, according to CrunchBase, which tracks startups' fundraising efforts.

But as the company started to get closer to going public, those around him had started to become concerned that he didn't fit the bill of a typical buttoned-up enterprise technology CEO, and Zhu's investors told him they wanted to replace him with a CEO who looked more like an enterprise company CEO," according to the complaint. Zhu saw this as evidence of pattern matching" and racism by another name."

It felt like there was a playbook," Zhu told Motherboard.

At first, the investors' comments were more subtle" and implied," he said. Zhu started to hear that he wasn't forceful enough" or too conflict averse" and that the board and investors wanted an aggressive" leader who was willing to pound the table," which Zhu by his own admission was not. I like to listen. I like to hear many opinions and try to build a sense of consensus in making decisions. I've personally felt that having more input from others and being able to find the pros and cons with many people is gonna lead to better outcomes." he said. But in their mind, that did not fit the picture of an enterprise software CEO."

Though many notable tech entrepreneurs, like former FTX CEO Sam Bankman-Fried, had little issue raising money in casual clothing, one potential investor took issue with Zhu attending a meeting with a potential investor in a T-shirt and shorts. The potential investor said the company's white COO looked more like" a CEO, according to Zhu. While Zhu saw it as proof the investor was not a good choice, his investors saw it as evidence that it was Zhu who was the wrong fit, per the complaint.

To Zhu, it felt like his clothing and management style were not the real issues but coded language," and that the investors were more focused on the style of his leadership than the actual substance of what was delivered," he said.

Eventually, he was asked to step down as CEO and take on the role of chief technology officer. I got the message that as an Asian American, I should be working on the technology, the product, but not be the CEO," said Zhu.

But it was important to Zhu that he not back down from the role. Part of the reason he had wanted to become the head of a company, he said, was to push back against the stereotype that Asian Americans could not be the figurehead of an enterprise company-I didn't see many Asian American CEOs"-so he felt it would be a betrayal to step down. That's just something that I just couldn't accept," he said.

With time, the situation grew tense. After Iterable secured a $60 million Series D funding round in 2019, two investors, Murat Bicer and Shardul Shah, told Zhu over dinner that they wanted to bring on a chairman of the board and replace him as CEO, with Shah citing the comment by a potential investor that Iterable's COO-who was white-more fit the profile of a CEO, according to the complaint. During the dinner, Zhu said an Asian investor had once warned him that the company would try to bring abroad a white CEO as the company prepared to go public.

In 2020, Bicer and Shah met Zhu and Andrew Boni, Zhu's co-founder, at a park, where Shah reiterated that he wanted Zhu to step down as CEO and instead serve as CTO. Zhu said a core drive of his was to show that an Asian American can succeed as CEO," and Boni agreed it was the wrong call, according to the complaint. Nevertheless, after the meeting, Shah sent an email to Zhu reiterating that the COO should replace him. At that point, it became explicit," he said. (Neither Bicer, a named defendant in the lawsuit, nor Shah, who was originally a defendant then dropped in an amended complaint, responded to requests for comment.)

The next year, Zhu started an organization called Stand With Asian Americans with the goal of ending discrimination against his community amid a spate of anti-Asian and anti-Asian American crime in the U.S.

I always felt some gratitude for being able to live the American dream. And so I wanted to give back and create more impact," he told Motherboard.

He had also become afraid that Iterable would terminate him and push the idea that he was an unsuccessful CEO. He started to speak to a reporter at Bloomberg with the goal of discussing his experiences with discrimination as an Asian American founder and CEO," according to the complaint.

Zhu told Boni, his co-founder, about the potential story, his mental health struggles, and the LSD experience, to which Boni expressed his concern, particularly about Zhu disclosing the discrimination he felt he faced and later told the board members. In April 2021, Boni and the board fired Zhu in a surprise Zoom meeting, citing the LSD experience and his conversations with the Bloomberg reporter. (Zhu told Motherboard he did not discuss confidential company information with Bloomberg.)

Boni, who is also Asian American, was named the new CEO, and two months later, the company announced a $200 million funding round, which, notably, had been completed before Zhu has been fired.

It felt to me that he finally succumbed to the pressures of the investors," Zhu said of Boni. It was very heartbreaking to see that."

That the company had used the microdosing experience as the reason sickened" Zhu. It had been a one-time experience, and he felt they were trying to destroy his reputation by driving the narrative that he was an unfit LSD CEO," erasing the context that preceded the decision.

Zhu's attorney said the use of the salacious" language nearly two years after the event-and after they found out about the possible Bloomberg story-came across as calculated. That the headlines screamed LSD CEO'-that's not an accident," said Charles Jung, Zhu's attorney.

Why Zhu was actually fired remains a matter of debate. But in his opinion, there was and is little ambiguity.

It was apparent to me," he said, that I didn't have the right face."

Correction: A previous version of this story stated that Justin Zhu took a microdose of LSD while raising Iterable's Series C round. He was raising Iterable's Series D round.