Zuckerberg and Musk have same problem: they are control freaks
MARK Zuckerberg and Elon Musk have both had weeks they would rather forget. At face value, their current travails have little in common. Zuckerberg, Facebook’s chief executive, spent much of last week dealing with the fall-out of the company’s past acquisitions.
Kevin Systrom and Mike Krieger, the heads of Instagram, quit amid hidden tensions with Zuckerberg about the photo-sharing app’s direction. Zuckerberg had been throwing his weight around at Instagram more than usual recently, after leaving it largely independent since he paid $1bn for it six years ago. Eventually, he pushed Systrom and Krieger too far.
Shortly after, WhatsApp’s co-founder Brian Acton twisted the knife. In an explosive interview, he revealed how relationships between Zuckerberg and the messaging app’s founders, Acton and Jan Koum, who sold WhatsApp for $19bn (€16.3bn) in 2014, soured over Facebook’s ownership until both left.
As for Musk, the saga over the Tesla boss’s doomed attempt to take the company private culminated last week when America’s financial regulator, the Securities and Exchange Commission (SEC), sued Musk for fraud.
On Saturday, two days after the SEC lawsuit, Musk settled with the regulator, agreeing to pay a $20m fine and step down as chairman. It was hardly what Musk anticipated two months ago when he sent the fateful tweet claiming he had “funding secured” for a buyout of his carmaker.
Given the possible punishments at stake – Musk being barred from running Tesla or worse – the outcome will be a relief for investors.
Tesla’s chief executive can easily pay the fine and the other condition – separating the roles of chief executive and chairman – is one of the first rules of good corporate governance.
What connects the troubles of Zuckerberg and Musk? Simple: the two share a desire for almost total control. Zuckerberg, despite a folksy public persona, is a ruthless tactician, practised at eliminating potential threats.
However, the same tactics play out within Facebook. Zuckerberg carefully curates a network of allies with unwavering loyalty and promotes them into key positions. Those who do not buy into the mission, as Acton clearly did not, and as Systrom and Krieger may never have done either, are edged out.
Musk, too, has centralised power. Tesla’s board includes his brother Kimbal and other directors have ties to his other company, SpaceX. He has dismissed calls for more independence, once telling an investor group to buy shares in Ford if they didn’t like it.
The problem is, in both Zuckerberg’s and Musk’s cases, their dictatorial control no longer seems to be working out for them. Facebook is beset by problems (the cyber-attack that allowed hackers to access 50 million accounts, revealed last Friday, is just one).
In Tesla’s case, it’s not hard to see how a more assertive board would have improved things during the recent buyout debacle.
Figureheads like Musk and Zuckerberg are lionised in Silicon Valley. Their recent problems suggests that they have let too much of that go to their head. (© Daily Telegraph, London)