Mark Zuckerberg: When Is A Good Time To Go?
By Mike Wheeler
By Mike Wheeler
One problem with being an innovator in any industry, is knowing when to let go. It must be even harder in the technology space, especially if you’re literally changing the way a lot of people run their lives. A roll call of innovators and those who have stamped their mark on the technology landscape reads like a good chunk of the Forbes rich list – Gates, Jobs, Dell, Ellison, Yang, Page and Brin all have made massive contributions.
Then there’s more recent arrivals on the landscape who have taken advantage of those innovations to create social media, which have taken the world of communications to new heights – and includes the likes of Twitter’s Jack Dorsey, the founder of the ill-fated MySpace, Chris DeWolfe, and Facebook’s indefatigable Mark Zuckerberg. And it is the latter of this trio that has been making headlines of late – and not for good reasons.
After its Initial Public Offering (IPO), Facebook shares have lost over half their value and people have begun questioning Zuckerberg’s ability to take the company to the next level. As he is finding out; once you go public, you’re no longer about to hide in the shadows or periphery – everything you do comes under scrutiny. Zuckerberg was already under the spotlight due to the explosion of Facebook into popular culture, followed by a popular movie based on his stellar rise. But once you ask other people to bankroll you, then the rules change. Not only do they change, but naysayers and skeptics want you to fail. And as the Harvard drop-out is finding out, there are plenty of people around dying to see him fail. However, for all of his critics, maybe Zuckerberg should stand fast, because history has shown that what Facebook is going through now, is nothing new.
The history of technology companies is littered with failures and successes, but it is the latter that we remember. Inevitably the successes are the only ones we remember, but even then, some ventures are lucky to be here. The most obvious is Steve Jobs and Apple. Everybody knows that he and co-founder Steve Wozniak started their business out of the Jobs’ garage. It was no easy task, but they managed to build the company up to such a point, that Jobs persuaded then Pepsi Cola President, John Sculley, to join his company. It was a decision Jobs lived to regret when Sculley caused him to resign in 1985. At one stage Apple shares were down to US$21, with things not looking good for the long-term future. But 11 years later, after Apple had been through a lot of ups and downs, he returned to the company. He brought with him a vision, promoted the design talents of Jonathan Ives, that gave us the iPhone, iMac, iPad, iPod and MacBook Air, and set about making Apple having more cash at hand than some sovereign countries. The share price has gone as high as $680.
Then you have Michael Dell who is the current CEO of Dell Inc, one if the biggest PC manufacturers on the planet. Dell started his company in 1984 at the age of 18 and by the time he was 27, he was the youngest CEO of a company ranked in the Fortune 500. In 2004 he stepped down as the CEO and gave the job to his right-hand man Kevin Rollins. But, three years later he was back at the helm after a myriad of problems with Rollins in charge, including a huge drop in sales.
And let’s not forget Yahoo co-founder Jerry Yang. One case that could mirror Zuckerberg’s career, Yang was another pioneer of the internet, and set up the search engine giant with David Filo 1994. Initially things went swimmingly for the company as it was at the cutting edge of the spread of the World Wide Web. However, Yang’s expertise in setting up such a portal didn’t translate well into being able to manage the company. When Yahoo went public it diluted both Silo and Yang’s ownership, and with new investors on board, making money became the primary concern. While Yang was the CEO from 2007-2009 he was roundly criticised for not accepting a buyout from software giant Microsoft, which was seen by some major investors as a premium. The fall out being that Yang stepped as CEO, and then resigned from the board and company in January this year.
Finally, there is Bill Gates. Gates stepped down as head of Microsoft to pursue more philanthropic endeavours, while leaving the company to be run by Steve Ballmer, a man Gates groomed since 1980. Although Ballmer became CEO in 2000, Gates didn’t step aside from being Chairman of the company until 2006. While there has been some criticism of Ballmer (especially missing the tablet explosion), he has generally steered the ship in the right directly, just not in a particularly spectacular way. Some even criticise his decisions for the share price dropping from an all-time high in 1999 of $58, to its current price, which hovers around the $30 mark.
Which brings us back to Zuckerberg. While his career mirrors that of Jobs, Dell and Gates, in that he went to a prestigious university and dropped out, he hasn’t had the honeymoon/probation period that the others have had – to make mistakes and fix them without being under public scrutiny. He has been in the spotlight almost immediately Facebook took off, so that period of grace has not been forthcoming. Is it fair to judge him when he hasn’t had the amount of time to find his feet that others in similar positions have been given? Yes, because we have no choice – he took the company public.
But the fundamental question is; can Zuckerberg steer Facebook back on track to where it will become profitable and pacify the investors who want a change at the top? More than likely. He knows the product inside out, is totally committed to it, and has stated his vision again and again. Whether he will be given the time is another thing altogether. Going from programming genius to CEO of a public multi-billion dollar company is no easy task, but if he can weather the next six months to a year, he’ll be around for the long haul. And with a 28 percent stake in the company, he will certainly have his say.