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After CEO Ousted at Salsa Labs, Some Ask: Will It Stay "Progressive?"

BY Nick Judd | Friday, October 19 2012

A leadership shakeup at Salsa Labs has some clients worried that the traditionally progressive firm, which accepted an injection of venture capital last year, may be preparing to discard its ideological association. Salsa officials say the company will continue to only serve progressive causes and their allies.

Salsa co-founder Chris Lundberg was ousted as CEO by the company's board of directors and another director, Scott Stouffer, appointed to replace him, Salsa officials confirmed to me Friday.

The leadership shake-up happened to facilitate further growth for the company, Salsa's vice president of marketing, Christine Schaefer, said in a phone interview Friday afternoon. Schaefer said Stouffer will re-affirm Salsa's progressive mantle in a blog post scheduled to be published later today. Lundberg and his co-founder April Pedersen remain majority shareholders of the company, but now have no leadership role.

"We need to continue to support our client's success and Scott's going to lead us," Schaefer said. "Those senior management team members who all joined the company because it's progressive, we're all committed, Scott's committed, the board's committed."

But clients and supporters say that the leadership shake-up evokes for them shades of other firms that have progressive roots but leaned towards nonpartisanship to varying degrees. While Salsa was founded to serve the technology needs of the progressive movement, but a search for the word "progressive" on now only returns one result outside of the company's user forums. That result is a blog post Pedersen wrote earlier this year reaffirming the utility of partisan technology firms after NationBuilder, which has always been nonpartisan but has progressive activists as its co-founders, announced a deal with the Republican State Leadership Committee. Ironically, some people in the field of progressive digital technology are saying that Salsa is headed down the same route that Pedersen and others accused NationBuilder of taking: One that turns tools built for people on the left and puts them at the disposal of anyone, including their opponents.

At stake is a technology provider that works with about 2,000 progressive campaigns and causes, from the AFL-CIO to numerous smaller organizations.

"We've already seen changes," said Erin Hofteig, a progressive digital activist who is founding partner at Middle Coast. While she wasn't speaking for the American Federation of Teachers in our conversation, she is also their digital manager.

"They've taken the word 'progressive' off of their website," Hofteig pointed out. "They're not focusing on a specific movement, that's how we've seen other companies begin to shift."

Salsa officials say the site underwent several touch-ups in the past couple of years, but deny that "progressive" has disappeared.

"I think it's clear that this is basically a hostile takeover from the investors that they took on and that clearly they're going in the direction of NationBuilder and, where they're sort of removing the progressive underpinnings of the organization and going to a pure profit model that doesn't hinge on a mission-oriented customer base," said Aaron Welch, founder of Advomatic, a digital consulting firm that also serves progressive organizations. "And I know there's a feeling out there that these tools have been built with progressive dollars, and indirectly through the clients that pay to use these tools, on the backs of progressive donor dollars. To turn around and say, 'Oh well, it's just technology, it's just a set of tools and everyone should be able to use them and that's good for everyone in democracy,' is pretty transparent and cynical when there's a profit motive involved."

These strong words were spurred by an email Pedersen sent out Wednesday and has been widely circulated among progressive digital activists. In the email, Pedersen writes:

When we took venture capital last year, we outlined a grand vision -- one that we continue to believe strongly in: that Salsa is capable of perpetuating the notion of Organizing very broadly -- beyond the sectors that we currently operate in and especially internationally. We can continue to lower the barriers to entry, continue to build a profitable business and be a force for good. The infusion of cash was supposed to help us realize our vision faster than we could before. Unfortunately, as it turns out, taking those funds which we did not need was the $5M nail in our coffin. We deeply regret this decision and our naivete in making it.

Pedersen did not return a call and email seeking comment.

Pedersen and Lundberg took a $5 million investment from Edison Ventures in 2011, saying at the time that they were excited for the opportunity to grow their company. Salsa was already growing, possibly faster than was easily manageable — outages at the end of summer 2010 and into that fall had cost clients access to donor dollars through email appeals and other systems. Some of the money from the investment was earmarked for infrastructure.

The company now has almost 70 employees, more than 2,000 client organizations and as many as 40,000 campaign managers using Salsa, Schaefer told me. Stouffer, who was formerly CEO of Edison's Visual Networks, was installed to manage the larger company Salsa has become. The company intends to make the case in an upcoming blog post that keeping its progressive moniker also makes good business sense.

But that can have varying meanings. Blue State Digital still serves only progressives inside the political sphere, although it also takes on corporate clients. And two years after the global communications company WPP acquired Blue State in 2010, it bought CrowdVerb, a digital consultancy co-founded by a long list of prominent Republican digital strategists. The two partisan firms now share the same corporate parent.

Working with nonprofits that are not expressly political but may advocate policies of a certain political stripe can also create problems.

"With a clientele our size it is literally impossible to make sure that all of our clients agree with each other all of the time," said Dave Leichtman, Salsa's vice president of services and support. "We often talk about the SOPA and PIPA issue as being a wild success for Electronic Frontier Foundation. At the same time, labor was for the actual legislation. We have organizations that disagree with each other on specific policy points."

This story has been updated. An earlier version was truncated because of a broken link.

This story has been corrected to reflect Dave Leichtman's proper title. He is VP of services and support at Salsa, not its director of communications.