Why Mark Zuckerberg Should Resign (Too)

Liz Truss is out as prime minister of the United Kingdom after only 45 days. Few will mourn or miss her.

Facebook (Meta) founder/CEO/all-powerful maestro Mark Zuckerberg has been around much longer - but he should follow her example and resign as well.

Not only has Zuckerberg's big bet on the metaverse seemingly paid very few dividends so far, it has also caused confusion and some anger internally at the company-formerly-known-as Facebook (i.e. Meta).

And just yesterday, Altimeter Capital's Brad Gerstner - a Silicon Valley legend in his own right - published an open letter to Mark Zuckerberg, urging him to 'right the ship' in short order.

While Gerstner's prescription for 'getting fit' may well yield results and his letter expresses abiding faith in founder-led companies like Meta (with Zuckerberg at the helm), it seems that the time has actually come for Zuck to step aside.

Here are a few reasons why:

The Vision Thing

Gerstner correctly points out that Meta has 'drifted' over time, due to its size, its sprawling setup and bloated workforce. While some of these issues may be (correctly) attributed to the shear size and scale of the business, there is an important caveat that must be noted.

As founder and CEO, Zuckerberg retains complete control over Meta with 55% of shares in his hands personally. This means that not only does he hold a majority of the wealth created by the company, he has also set himself up as the ultimate visionary for the company.

And when it comes to vision, there is some cause for concern. After proving himself prescient in building the world's preeminent social network and leveraging a wide range of technical innovations to build the platform, Zuckerberg has run out of gas.

The majority of features added to Facebook, as well as Instagram and WhatsApp, are copies of the more innovative ideas brought out by competitors. The dominant market position of Meta, of course, makes this possible - but the lack of hard-core product innovation with new and exciting features developed in-house makes it clear that there is a serious lack of vision from the man at the top.

What is more, the move to the metaverse came too late and was overdone. Rebranding Facebook to Meta may have made sense on a certain tactical level. In the minds of PR experts, rebrandings can always 'magically' wash away the bad memories of former sins. But going so strong, so fast made Facebook and Zuckerberg look desperate.

And desperation is not a quality to be found in a visionary leader or a visionary company.

Bottom-up vs Top-down Strategy

The move towards the metaverse, and the gigantic investment associated with it, illustrate another key fault.

When Facebook got started, it was built (by Zuckerberg and his friends) from the bottom up. The core team built the tech platform and did the necessary leg-work to nurture both the demand and supply side with a strong focus on developing the necessary network effects to make the platform scale quickly.

This style of product development was close to users and to a certain degree required even personal effort to get the database filled up with users. Like many ambitious startups, Facebook moved quickly and (yes) broke a few things along the way. It was this 'down in the weeds approach' that made it so successful.

Contrast this pioneering mindset with the current setup - and in particular with the decision to push towards the metaverse. For all intensive purposes, this step may be understood as an 'edict from on high' - a decision taken by the all-mighty Zuckerberg and perhaps a handful of lieutenants and pushed down on the entire organization.

While size and scale - and other considerations - may dictate that CEOs operate in this manner sometimes, it represents a dramatic shift in strategy for Meta/Facebook. Instead of creating a new, highly engaging product based on an understanding of human nature and desire, Meta has thrown itself on a trending fad in the hope that it will be 'the next big thing'.

This kind of 'big, top-down bet' under the direction of one person rarely turns out well.

Reputation, Reputation, Reputation

When a company screws up, the ultimate responsible person is the CEO.

Over the past few years, Facebook has suffered not one, not two or even three serious reputational setbacks. From Cambridge Analytica to Russian election meddling to questionable content moderation, Zuckerberg's baby has faced almost as many setbacks in recent memory as Credit Suisse.

And yet despite these various and sundry faux pas, Facebook (along with several other prominent firms) had the audacity to launch a questionable crypto-focused project with the goal of building a global currency for payments.

In due time, Libra failed - as we all now know - mostly because regulators could not trust any such ambitious project with ties to Facebook and its sketchy track record on privacy, security and impartiality.

If Meta is to pull through and go on to do more great things - things which may end up being as ambitious as Libra was at the beginning - it cannot have the dead weight of a CEO on whose watch so much went wrong.

It's the innovation, stupid...

Ultimately, the success of any company as large as Meta comes down to its ability to innovate. And no firm in the world has a CEO with a complete monopoly on good ideas.

If Meta is to prosper, it will require both continued strong execution and technical excellence as well as a strong vision and culture of open innovation.

The opposite of open innovation is a culture where new projects and plans are pre-ordained and passed down without discussion or input. Zuck in his current form resembles exactly such a king with a feeling of self-assurance and sense of infallibility. Over time, such a kingdom is doomed to fail.

If Meta - with all its products and platforms - is to be a strong leader for the future, it cannot simply copy the innovations of others and it (and its board of directors) cannot tolerate a CEO who takes the easy way out by simply trying to do what others have already done.

At the end of the day, it's all about the innovation...

While there is little doubt that Mark Zuckerberg will hold onto his position at Meta - and continue to muddle through - it is also interesting to think about what new and exciting possibilities might be unleashed if Zuck actually stepped back.

Meta would be free of its autocratic leader. Its management could re-focus and re-evaluate their business in a new light and with a new mandate for innovation.

At the same time, Zuckerberg could take his billions and re-focus his energies on the passions and projects that he cares about most.

In the end, it would be a win-win situation for all.