EDITOR: | February 3rd, 2016 | 2 Comments

Why technology needs the right people pushing it

| February 03, 2016 | 2 Comments
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Perhaps we’ve been missing something in our coverage of tech metals, tech entrepreneurs and making companies work. That is, the factor of having a one-person driving force, possibly a dominant founder.

Now I am not claiming this as my own brilliant insight. The credit must instead go to John McDuling of the Australian Financial Review. He has just written a piece looking at the troubles at Yahoo, the company that is about lay off 15% of its staff. McDuling makes the point that, while she has been blamed for much of the troubles in which Yahoo finds itself, it is not all Marissa Mayer’s fault. His argument is that tech companies need to be controlled by a dominant founder; if they are not, then trouble awaits.

But let me take the issue a step further and apply it to InvestorIntel.

It’s a point that we could consider in our own space. It is interesting that, with many of the companies associated with InvestorIntel, there is often an identifiable person who is seen as the key driver of the respective company, and in some cases has been involved since the early days of that company. Now, the “dominant founder” rule does not apply neatly, because mining (particularly) doesn’t work the same way as something like Snapchat or Amazon.

McDuling has a point, though. Yahoo was once one of the go-to names when it came to search engines. It jumped on the internet bandwagon early and was an industry leader. Today, that is not the case ( as it is not with many other search engine start-ups, such as LookSmart, Web Crawler and Altavista, among others). The founders of Yahoo, Jerry Yang and David Filo, did not keep the reins in their hands. Those reins have been held (sometimes briefly) by others – for example, Carol Bartz, Tim Morse and Scott Thompson, as well as Mayer. Jerry Yang cut his ties with Yahoo in 2012 and, while Filo still sits on the board, there has been criticism about his seeming reluctance to speak publicly about the company.

By contrast, there are examples where the dominant figure has been the driver. Think of Jeff Bezos at Amazon, Mark Zuckerberg at Facebook, or Evan Spiegel at Snapchat.

In the past, too, when other technologies ruled, the leadership rule has proved crucial. MGM dominated Hollywood thanks to Louis B. Mayer (and his decision to let Irving Thalberg run the studio production line, but MGM did not fade with Thalberg’s early death). In newspapers, look how News Corporation has come to dominate many markets and that’s thanks to Rupert Murdoch (who did not found the company – his father did that – but who took an afternoon newspaper in Adelaide, South Australia, and built an empire). In other fields we have seen Warren Buffett and Richard Branson being the driving force behind their companies.

Which brings us to Elon Musk. He did not found Tesla Motors, but he sure has taken it to where it is today. Just in the past weeks he continues to push the boundaries of ideas, the most recent being electric aeroplanes. And Tesla, apart from building a battery gigafactory, is about to launch Tesla Model 3, a car with a battery range of 200 miles and retailing at $30,000.

Back to John McDuling. He cites the case of Twitter whose founder, Jack Dorsey, has spent much of the time running another company, Square. There have been recent departures from the senior ranks and this week The New Yorker proclaimed “The End of Twitter”, citing its failure in regard to abuse and vitriol its users sometimes indulge in. (Plenty of people disagree with The New Yorker, however.)

You can push any argument too far. There are plenty of companies that are successful and their founders have long departed or are long dead. But it is worth just keeping in the back of your mind, when following InvestorIntel, that we are reporting on cutting-edge companies and technologies. Keep in mind that these companies are where they are today thanks to the right people being at the wheel. And at the wheel in difficult times.


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Comments

  • Bill

    How about electric motor design expert Jim Hendershot, with 40 years practical hands on experience, who still believes that rare earth permanent magnets are the number one choice hybrid and electric vehicle motors and continues to recommend them in his international consultancy work.

    February 3, 2016 - 6:31 AM

  • Ann Bridges

    If you read Adam Smith’s “The Wealth of Nations”, he points out that capitalism works best/only when the founder/owner has a stake in the game (and has his name on it–Carnegie, Rockefeller). That morphed into Silicon Valley promising stock options to one and all to keep them focused on the long-term success of the company. Unfortunately, that morphed into focus on short-term success of the stock price, not the company. When a good leader comes in with the right focus, regardless of whether a founder or not, generally he/she gets results.

    February 3, 2016 - 3:04 PM

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