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How tech giants are ruled by control freaks

By The Economist

Facebook, Google, Alibaba et al offer lessons in the dark arts of corporate controlRead full story

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  • William Lewis
    William LewisCEO at Dow Jones & Company

    consider eight founder-run firms: Alibaba, Alphabet, Amazon, Facebook, Netflix, Tencent, Tesla and SoftBank. The median economic stake of their founders is 13%. On the current trajectory that will fall to 8% in half a decade; the tech tycoons might cash out even faster.

  • Ian Myers
    Ian MyersFounder at Country House Enterprises

    The companies that are listed continue to grow steadily and it would be interesting to see how much founder control can positively or negatively impact long term growth.

    Lack of governance is never a visible issue until a crisis. Facebook has seen this with their recent Russian advertising issues, and Uber with one scandal after another. Founder's long term vision and understanding can help companies grow rapidly, but an objective board is necessary to keep everything balanced.

    Interesting to

    The companies that are listed continue to grow steadily and it would be interesting to see how much founder control can positively or negatively impact long term growth.

    Lack of governance is never a visible issue until a crisis. Facebook has seen this with their recent Russian advertising issues, and Uber with one scandal after another. Founder's long term vision and understanding can help companies grow rapidly, but an objective board is necessary to keep everything balanced.

    Interesting to see Snap not included in this article, as Spiegal would most likely be classified as a control fanatic.

  • The relevant point is less about control and more about alignment of incentives.

    The Facebook example is an interesting one. After donating a significant portion of his wealth to his foundation, Zuckerberg famously maneuvered to maintain voting rights in spite of his personal wealth no longer being explicitly tied to share price.

    Some might argue this is reflective of his evolving ambitions, others might argue its a dangerous move where his incentives and those of the shareholders have diverged.

  • Ken Breen
    Ken BreenDow Jones

    Control freakery is undeniable within Tech and there are numerous examples, from Ellison to Jobs, of why this kind of dynamic works. However, I would suggest founder control is less important economically than building a team and a board that can deliver long term value and performance. The bigger the business the more talent you need to be successful and the more varied the return on reward.

  • Of course; entrepreneurship is hard enough let alone when there are billions of both dollars and people at stake.

  • And the article doesn’t even mention Steve Jobs, who was a legendary control freak!

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