Name the person: a well-known, public, tech entrepreneur wearing black shirts who:
set a punishing timeline and dismissed concerns among senior executives and key designers that the new look wasn’t testing well, say some of the people. He rejected his team’s pleas for more time.
Yes, exactly, Snap CEO and co-founder Evan Spiegel. This worked, right? This is what happens in Silicon Valley?
It was a debacle. When the redesign made its debut in February, users widely panned it. Snap lost users for the first time in its history over the next quarter. Its revenue, which comes mostly from advertising, continued to rise. But its share price has fallen roughly 76% since its February peak, reaching an all-time closing low of $4.99 Friday and reducing Snap’s market capitalization from nearly $25.5 billion to about $6.5 billion.
Silicon Valley has an odd management model. When Steve Jobs, Elon Musk, or any of the other Valley heroes “push conventional thinking” over the objections of their stakeholders, they are lauded as visionaries. But of course, their valuations and revenue (though not their profit!) have kept rising. As soon as that goes away (see: Holmes, Elizabeth), the founder suddenly becomes immature, tyrannical, and unable to run a company–even though they are doing the same things they did while they were “successful.” This even happens within a company:
The redesign mess adds to troubles swirling around Snap and raises questions about whether Mr. Spiegel’s management instincts can help it pull through. His style—trust instincts, take control of details, ignore naysayers—paid off during Snap’s meteoric rise after its 2011 founding.
Snap Chairman Michael Lynton calls Mr. Spiegel “a brilliant, responsible and thoughtful leader,” adding that “Evan’s decisions on how best to grow Snap are exactly what has created such a positive user experience.”
He’s probably right, by the way. I am not sure a consensus-building CEO would have made millions for the Catholic Church the way Spiegel did.
But how do you pick the visionary CEO? How do you know whether the CEO is the Elon Musk and not the Elizabeth Holmes?
A few other questions:
- Do visionary CEOs have to be tyrants? Is this unfettered freedom and demand for excellence what allows them to build superior products and services–or is it a side effect? This reminds me of the Ray Dalio debate: does Bridgewater’s unusual view of human behavior allow it to beat the market, or does it have a superior investment philosophy and also has a philosophy of human behavior?
- Do investors care? If you are behind the veil of ignorance and have the option to choose between a manager that listens to their board, has happy employees, and a good chance of slightly outperforming, or a manager that goes rogue, has fearful employees, and some chance of drastically outperforming and a high chance of failing–which would you prefer? The latter’s risk profile sounds eerily like a venture capital investor’s risk profile
- If you hit a “moonshot” and find a tyrannical visionary who drastically outperforms, are they more likely to succeed going forward? We likely do not have enough data to know for sure, but the next iteration of Snap, plus the next generation of startups founded by Musk and others, will be telling