4 ms·

I think that it is inevitable execs and talented developers will leave an organization at some point because there is only so much value you can get by sticking

by bceagle 14y ago

I think that it is inevitable execs and talented developers will leave an organization at some point because there is only so much value you can get by sticking around indefinitely. The issue here is the timing of when they are leaving. You can't ignore the signals that Zuckerberg is in way over his head. He did a great job getting the company to this point but perhaps the next major departure/reassignment is his. It is not unprecedented to have the board of a public company replace the founder with a more experience CEO and that is what it seems like is needed in this case.

colinplamondon 14y ago
Because their stock has dropped?
- Spooky23 14y ago
  The departure of key execs who aren't the beneficiaries of a big windfall is seen as a bearish indicator for the future of the stock price. That doesn't necessarily mean anything with respect to the long term prospects for the company. Also, are these folks key execs? No idea.
taligent 14y ago
You do know that Zuckerberg has majority voting stock right ? So it doesn't matter whether the board thinks he should be replaced. He will be CEO until he is either sick of the job or unwell. But either it will be at his choosing. And people need to remember that there is a lot of very rich people at Facebook now. It wouldn't surprise me if we see a lot more people resigning to create their own startups or buy an island.
- pnathan 14y ago
  I seem to recall that Microsoft minted millionares as well in the '90s. Did they have an outflow of the rich too? (I don't know).
  - mikeryan 14y ago
    I think there's always a risk of an outflow of people once their stock options hit. That being said, the article actually makes the point that for two of these departures they may be leaving not because of hitting it in the SV lottery but because they're not going to see a payout because their options were priced in at an overly high valuation. Facebook may get hit from both ends, those who have been there 3-4 years ago may be cashing out, those that joined in the last 1-2 years may be leaving because they won't see any return on their options.
  - drumdance 14y ago
    Microsoft's market cap grew slowly compared to Facebook, so even if you joined the company 5 years after the IPO there was still a lot of headroom in the stock. But once it hit $200 billion (or whatever they top end was), potential new hires started wondering what the upside was. It's not likely to become a trillion dollar company, so you're looking at a max multiple of 4-5. But back when it was at $20 billion it was a little easier to drink the koolaid and imagine a higher multiple.
- mtgx 14y ago
  I think now more than ever Mark would want to maintain it's majority share, otherwise the board might start considering replacing him if things keep going downhill from here.
- bceagle 14y ago
  Sorry, I actually wasn't thinking of the board forcing Zuckerberg to step down. I was more thinking about the Google situation where Schmidt took over CEO for a couple years while Larry Page hung around doing something else.
SkyMarshal 14y ago
>You can't ignore the signals that Zuckerberg is in way over his head. Yeah, you can. You can chalk them up to statistical noise resulting from a few engineering and business model problems that need to be solved, which shouldn't be surprising in the relatively early days of a unique new business model like Facebook. Just ignore the Silicon Valley and Wall Street news industry echo chamber, their fundamental business model is about turning statistical noise into ad impressions and cash flow. This too will pass. >He did a great job getting the company to this point but perhaps the next major departure/reassignment is his. It is not unprecedented to have the board of a public company replace the founder with a more experience CEO and that is what it seems like is needed in this case. As pointed out above, Zuck owns a controlling interest, so this won't happen. But more importantly, there no CEO alive with more experience in this domain than Zuck. Who are you thinking of, Tom the Myspace founder? An ex-Yahoo CEO? There's still no one better than Zuck for this, so even if he could be replaced it would be foolish to do so.
- viscanti 14y ago
  By most accounts Sheryl Sandberg is handling most of the traditional CEO duties. Zuck has the benefit of being a founder CEO, with an experienced exec in Sandberg to help. Any issues Facebook faces, won't be because Zuck is in over his head. The problem that Zuck (and Facebook at large) face is that there's a rift between expectations (100 Billion+ valuation) vs reality (it's a profitable, but much smaller business). Facebook needs to either change their belief (or expectations) or reality (somehow morph into a 100 Billion+ company). Neither is easy to do, but now that Facebook is a public company, they've at least got a chance. Market forces can help guide them to a realistic valuation, and given enough time as a profitable but lower valued company, it's possible they'll reset their expectations to something more realistic. Or they could finally pull the rabbit out of the hat and become a 100+ billion dollar company.
- corin_ 14y ago
  I'm not saying Zuckerberg should be replaced - I don't know nearly enough to even have an opinion, yet alone one that I think is correct, and if I did think he should be replaced I'd have no idea who would be a good replacement. However I disagree with "There's still no one better than Zuck for this". You were right that nobody has has much experience in specifically this area, however that doesn't mean there is nobody who could do his job better. It just means there's nobody who you can glance at and say "based on the headlines in their CV, they clearly have more practice doing this and their past results look good". An incredibly over the top example of my point: If tomorrow Zuckerberg introduced a company policy of "no black staff, no black facebook members" I would definitely argue there are people who could do his job better based on that one policy alone. However the question of "most experience" would not have gained a new answer overnight.

by bceagle 14y ago

colinplamondon 14y ago

Because their stock has dropped?

Spooky23 14y ago
The departure of key execs who aren't the beneficiaries of a big windfall is seen as a bearish indicator for the future of the stock price. That doesn't necessarily mean anything with respect to the long term prospects for the company. Also, are these folks key execs? No idea.

taligent 14y ago

You do know that Zuckerberg has majority voting stock right ? So it doesn't matter whether the board thinks he should be replaced. He will be CEO until he is either sick of the job or unwell. But either it will be at his choosing. And people need to remember that there is a lot of very rich people at Facebook now. It wouldn't surprise me if we see a lot more people resigning to create their own startups or buy an island.

pnathan 14y ago
I seem to recall that Microsoft minted millionares as well in the '90s. Did they have an outflow of the rich too? (I don't know).
- mikeryan 14y ago
  I think there's always a risk of an outflow of people once their stock options hit. That being said, the article actually makes the point that for two of these departures they may be leaving not because of hitting it in the SV lottery but because they're not going to see a payout because their options were priced in at an overly high valuation. Facebook may get hit from both ends, those who have been there 3-4 years ago may be cashing out, those that joined in the last 1-2 years may be leaving because they won't see any return on their options.
- drumdance 14y ago
  Microsoft's market cap grew slowly compared to Facebook, so even if you joined the company 5 years after the IPO there was still a lot of headroom in the stock. But once it hit $200 billion (or whatever they top end was), potential new hires started wondering what the upside was. It's not likely to become a trillion dollar company, so you're looking at a max multiple of 4-5. But back when it was at $20 billion it was a little easier to drink the koolaid and imagine a higher multiple.
mtgx 14y ago
I think now more than ever Mark would want to maintain it's majority share, otherwise the board might start considering replacing him if things keep going downhill from here.
bceagle 14y ago
Sorry, I actually wasn't thinking of the board forcing Zuckerberg to step down. I was more thinking about the Google situation where Schmidt took over CEO for a couple years while Larry Page hung around doing something else.

SkyMarshal 14y ago

>You can't ignore the signals that Zuckerberg is in way over his head. Yeah, you can. You can chalk them up to statistical noise resulting from a few engineering and business model problems that need to be solved, which shouldn't be surprising in the relatively early days of a unique new business model like Facebook. Just ignore the Silicon Valley and Wall Street news industry echo chamber, their fundamental business model is about turning statistical noise into ad impressions and cash flow. This too will pass. >He did a great job getting the company to this point but perhaps the next major departure/reassignment is his. It is not unprecedented to have the board of a public company replace the founder with a more experience CEO and that is what it seems like is needed in this case. As pointed out above, Zuck owns a controlling interest, so this won't happen. But more importantly, there no CEO alive with more experience in this domain than Zuck. Who are you thinking of, Tom the Myspace founder? An ex-Yahoo CEO? There's still no one better than Zuck for this, so even if he could be replaced it would be foolish to do so.

viscanti 14y ago
By most accounts Sheryl Sandberg is handling most of the traditional CEO duties. Zuck has the benefit of being a founder CEO, with an experienced exec in Sandberg to help. Any issues Facebook faces, won't be because Zuck is in over his head. The problem that Zuck (and Facebook at large) face is that there's a rift between expectations (100 Billion+ valuation) vs reality (it's a profitable, but much smaller business). Facebook needs to either change their belief (or expectations) or reality (somehow morph into a 100 Billion+ company). Neither is easy to do, but now that Facebook is a public company, they've at least got a chance. Market forces can help guide them to a realistic valuation, and given enough time as a profitable but lower valued company, it's possible they'll reset their expectations to something more realistic. Or they could finally pull the rabbit out of the hat and become a 100+ billion dollar company.
corin_ 14y ago
I'm not saying Zuckerberg should be replaced - I don't know nearly enough to even have an opinion, yet alone one that I think is correct, and if I did think he should be replaced I'd have no idea who would be a good replacement. However I disagree with "There's still no one better than Zuck for this". You were right that nobody has has much experience in specifically this area, however that doesn't mean there is nobody who could do his job better. It just means there's nobody who you can glance at and say "based on the headlines in their CV, they clearly have more practice doing this and their past results look good". An incredibly over the top example of my point: If tomorrow Zuckerberg introduced a company policy of "no black staff, no black facebook members" I would definitely argue there are people who could do his job better based on that one policy alone. However the question of "most experience" would not have gained a new answer overnight.