Facebook stock, continuing its disastrous slide, is now worth half of its price at IPO. Peter Thiel, Facebook’s first major investor, dumped nearly all of his stake in the social network for $400 million. Wall Street grumbling has led USA Today, the Los Angeles Times and NBC News to run stories in the last few days all asking the same question: is Zuckerberg’s job secure?
Monday’s Mashable poll asking if the founder should step aside has, at time of writing, 2,600 respondents saying he should go. Just under 2,800 support Zuckerberg, with 800 on the fence. That’s a victory of sorts for him, but not exactly a ringing endorsement.
Let’s be clear: Zuck isn’t in any immediate danger of being booted. The terms of the IPO saw to that. He controls 57% of the voting shares in the company. The movement against him, if you can call it that, has no real leadership. His most obvious internal replacement, COO Sheryl Sandberg, is a longtime ally.
No, the only person who could make Zuckerberg step aside for a different role, or leave the company altogether, is Zuck himself. And why would he ever want to do that?
Well, because every successful founder has to concede at some point that the company has outgrown their abilities to manage it. Because Zuck is 28 and has no prior experience at the helm of a company this large (3,500 employees and growing fast).
Because Facebook appears to be going through a sophomore slump where it could benefit from a fresh perspective, particularly in the areas of user experience, privacy, advertising, and investor relations.
And because there is absolutely no shame in it. There are a number of powerful precedents for tech companies where the founders ceded control, each with positive results for the founder in question. Their names: Apple, Google and Microsoft.
The Apple Precedent
Steve Jobs’ ejection from Apple in 1985, and his triumphant return in 1997, is the stuff of business legend. True, no founder would want to replicate Jobs’ year-long emotional feud with CEO John Sculley (whom Jobs hand-picked to lead his company, then fell out with). Nor would they wish to deal with their baby on life support, which is what Apple was when Jobs was brought back into the fold by the purchase of his second company, NeXT.
But the lesson remains: an arrogant twentysomething founder was forced into the wilderness, and the shock of it turned him into one of the greatest tech leaders of all time.
By 1997, Jobs was in his 40s. He had mellowed considerably, to the point where he was able to swallow his pride and ask his old rival Bill Gates to make a life-saving investment in Apple. The NeXT software he brought with him formed the basis of Mac OSX. He had also bought a tiny animation company, Pixar, turned it into the envy of Hollywood, and forged the connections that helped make Apple such a major player in the entertainment world.
What could Zuck build if he walked away from Facebook tomorrow, leaving it in Sandberg’s capable hands? What would be his NeXT? And how would it benefit the tech world in the long run? Millions of us would no doubt be delighted to find out.
But if he doesn’t want to take that drastic a step, he could also take the compromise that Sculley suggested — and Jobs, in his pride, refused — become the company’s chief innovation officer, take a bright young team of engineers, form a skunkworks.
Had he been freed from major management responsibility and the drama that came with it, it’s possible that Jobs’ second round of revolutionary products could have arrived a lot earlier — and the most valued company in history could be worth even more.
The Google Precedent
Plenty of founders step aside from the CEO role voluntarily. Larry Page and Sergey Brin, both in their 20s and aware of their inexperience in business, headhunted the perfect CEO for Google.
In Eric Schmidt, they found an ideal mentor and partner. They were certain they shared the same values, because of one of the criteria: the winning candidate, Page and Brin said, had to have gone to Burning Man. Schmidt had. He got it, got them, got Google.
Schmidt liked to joke that he was providing the adult supervision at Google; in fact, as well he knew, he was one leg of a powerful triumverate. From 2001 to 2011, Page and Brin were free to learn from him, lead projects, and still effectively retained control of the company if they both agreed something should be a certain way.
The Schmidt decade saw Google go from a promising search engine to a global tech powerhouse. Finally, in 2011, Page was ready to take the helm as CEO and all the boring stuff — management of sales teams and vice presidents — that goes with it. Schmidt settled back into an executive Chairman role.
What if Zuck and Sandberg were to headhunt their ideal CEO and form a triumverate? They could take their time and find the ideal candidate, someone who would fit in with Facebook’s hacker culture. They would still retain control, if they felt the new guy didn’t quite get something.
And Zuck would be able to learn the craft of CEO-ship from a slight distance. Following the Google model, he could step back into the role in 2022, at the age of 38: older, wiser, and ready to take on Wall Street and the world.
The Microsoft Precedent
In January 2000, Microsoft founder and CEO Bill Gates stepped aside for his old friend Steve Ballmer. Gates became Chief Software Architect. One might argue that he should have done it earlier; a different CEO might not have provoked the Department of Justice into its antitrust lawsuit the way Gates did in the late 1990s. One might also argue, based on Ballmer’s record in the last decade, that he should have chosen a different successor.
Regardless, it was a phenomenally good move for Gates himself. Almost overnight, the sullen man in the DOJ deposition video, known for shouting at his underlings, transformed into a smiling, globetrotting philanthropist, known for appearing on the cover of Time Magazine with Bono.
Gates remained at Microsoft until 2008, and still got to oversee key Microsoft initiatives such as the Xbox and Xbox 360. He let go in stages, handpicking his successor as Chief Software Architect, the legendary Ray Ozzie. It’s hard to imagine a more graceful exit from the company you love.
So there are three exit models from recent tech history. One if Zuck wants to go start something else, to relive his glory student days; one if he wants to stay at the top of the company while learning the craft from an industry pro; one if he wants to transition out of tech altogether.
Of course, there’s nothing to stop him sticking around, enduring the slings and arrows of NASDAQ. He’s more than earned the right to stick it out.
But as Facebook tries to figure out how to turn nearly a billion users into a lasting tech company — how to enter the pantheon of thriving giants such as Apple, Google and Microsoft — Zuck could do worse than to follow their examples.