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Summary:

When is the time right for a founder to give up the CEO post? It’s a question you will likely have to ask yourself — if your company is at all successful. I’ve had this founders’ dilemma on the brain ever since I read last week’s […]

zuckerberg500big.jpgWhen is the time right for a founder to give up the CEO post? It’s a question you will likely have to ask yourself — if your company is at all successful.

I’ve had this founders’ dilemma on the brain ever since I read last week’s Wall Street Journal feature on Mark Zuckerberg, Facebook CEO Seeks Help as Site Grows Up, following his company’s announcement, Mar. 4, that it had hired Googler Sheryl Sandberg as COO.

Facebook ‘s board obviously senses that the company needs more adult supervision, but the piece makes clear that Zuckerberg has no intention of giving up the top job yet. So I read with keenest interest this graph the WSJ piece:

Mr. Zuckerberg’s experience is emblematic of Silicon Valley’s accelerated culture, where startups change more in a few years than most companies do in decades — forcing CEO-founders to adapt quickly in order to survive in their roles. The founders of Google, Yahoo Inc. and eBay Inc. all handed the reins to outsider CEOs within three years of founding their companies.

Is Zuckerberg adapting enough? I’m not so sure. Then yesterday I read GigaOM colleague Stacey Higginbotham’s column, Zuckerberg Isn’t About the Money, published from SXSW… where Zuckerberg was interviewed by Business Week’s Sarah Lacy.

Stacey wasn’t impressed. She writes that Zuckerberg’s oration, focused on the grand “Facebook vision” rather than more practical business topics such as features-development or monetization

…[demonstrated] the kind of starry-eyed idealism that is either patently untrue or shows how much Zuckerberg still needs to learn about running a company. I’m all for staying focused on your business rather than chasing every dollar, but at the end of the day a company whose CEO is focused on communicating a message rather than figuring out how to turn a profit is delusional. Sure, sometimes the Field-of-Dreams approach works, but sometimes it just ends up like Kozmo or Webvan.

I think Stacey is right, and I’m wondering:

* Is Zuckerberg wise to think he can be one of those very rare founder-CEOs, like Bill Gates, who can run his company from the corner office for its first 25 years? Stats show that most founders cannot do this — no matter how stellar their panel of advisors is — and unlike Zuckerberg, Gates had some very highly-qualified, and older equal partners at the helm of Microsoft from the start. Even if Paul Allen didn’t stay, his influence was important early on.

* How much time does 23-yr-old Zuckerberg really have to “learn” about how to be a CEO? (At the foot of investors like Roger McNamee!)

and…

* Would it have been wiser to give Sandberg the top job now?

Tell us what you think.

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  1. Boring Market Monday, March 10, 2008

    Zuckerberg had the technological understanding to launch Facebook and, no pun intended, is the face of his company. I think when his generation grows up the pressure will be on in order to revamp his company to meet changing demands he might have to change his mind the hand over the reins. It is hard to forget it still is a pretty new company, and they have yet to find a way to make money.

  2. Sal Cangeloso Monday, March 10, 2008

    One day someone is going to have to tell me what is so attractive about these professional CEOs. I’m not saying Zuckerberg is the right guy for the job, or that just because you are the founder means you can be a great CEO, but I’d like to really understand what a pro CEO would bring to the table. I mean, aside from being good at interviews and looking like they were born in a suit. It seems like Zuck has done a pretty solid job so far even if a lot of people don’t seem to like him…

  3. Second Life: Founder Phil Rosedale is Out as CEO « FoundRead Friday, March 14, 2008

    [...] Another day, another dollar, and the hottest topic in the founders-sphere is still this one: When should you hire a pro-CEO? [...]

  4. Andrew Scott Sunday, March 16, 2008

    @Sal What they bring is an unemotional focus on the bottom line, turning a dollar and the experienced skillset of reporting to shareholders and managing business relationships. I dont know how good a job Mark is actually doing, because I dont know the company nor him well enough. From the outside, its probably fair to say he is doing OK (afterall, who wouldnt want that $15b valuation, whether realistic or not). It’s not about being the face of the company – being the CEO is about the performance of the company.

  5. Andrew Scott Sunday, March 16, 2008

    PS> I meant to add that while he atleast appears to be doing OK, Carleen is right that his interview performance was pretty lousy; it was all about ‘the dream’ and he didnt seem to have any strategy about what he intended to communicate about the business or about its revenue streams (or lack of). That may still not matter at this stage (and who am I to judge – at 23 I had just exited my web development company for a damn site less than $15b !!!!) but there is a lot of money at stake and as the hype calms and people are more willing to take a more objective view of Facebook and its financial performance, Mark is going to have to deliver the goods. He has without a sterling board advisory team from whom he is learning at an accelerated rate – and he’s a bright guy; but its too early to judge – in my view – whether he’ll stay long term or not. My money would be on not; he’ll get shifted sideways at some point.

  6. As a CEO I can say that we bring a specific set of skills focused only on the business aspects. When it becomes clear the business is suffering, you get a competent CEO in. The challenge with start-ups is to know when the business is suffering; what are the indicators? Is the business scaling up? This involves organizing resources so that the business can grow and structures are created to meet the resulting complexity. In the case of Facebook it is absolutely right to bring Sheryl in as COO; you want Mark and his genius but also someone who can keep an eye on the scaling up needs.

  7. RT @shields_word: Facebook shares some secrets on making MySQL scale http://t.co/MPOrZNt9…

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