Billionaires Go Mad Musk, Zuckerberg Cuts Jobs, Rolls the Dice

As Elon Musk and Mark Zuckerberg lay off thousands of workers to pursue their personal vision for the future of the Internet, the fate of Twitter and Facebook rests in the hands of these two billionaires. There are, say experts — and two iconic bay-ending area tech companies are far from clear.

Under CEO and founder Mark Zuckerberg, Facebook’s parent company, Meta, has set out to pursue an immersive online world that Zuckerberg calls the “Metaverse”, the future of social life, work, entertainment and commerce. Billions of dollars are at stake.And under CEO and recent acquirer Elon Musk, Twitter is let advertisers go Earnings have plummeted as Musk pursues a free-speech agenda that he claims fosters diverse perspectives and allows users to crowdsource the truth.

“These are high-risk bets by Musk and Zuckerberg that have backfired in spectacular ways so far,” said Dan Ives, technology industry analyst at Wedbush Securities.

Two corporate leaders put themselves and their dreams in the spotlight to achieve ambitious goals at great expense. In the past two weeks, both have put huge numbers of employees out of work — 11,000 on Facebook Nearly 4,000 people on Twitter 900 in the Bay Area — to revolutionize the company while highlighting plans deemed dubious by many observers.

According to Tom Coates, a prominent Silicon Valley tech industry strategist, the two billionaires have their own characteristics.

Zuckerberg founded social media giant Facebook, while Musk founded revolutionary electric car giant Tesla and pioneering rocket company SpaceX. But the skills each CEO used to create these successes didn’t always translate to new companies, and observers say Musk and Zuckerberg enjoyed their celebrity and could do no wrong. He said he might have convinced him.

Steve Blank, Adjunct Professor of Management Science and Engineering at Stanford University, said:

The two leaders cut advertising spending on which recession fears depend, short-video platform TikTok gained market share, and changes to Apple’s privacy policy put Facebook’s invaluable ability to track consumers across the web. It is a major company suffering from a wide range of challenges, such as Twitter. Eight of the last 10 years have been in the red.

In a conference call with analysts last month, Zuckerberg said of the so-called metaverse: It is not only the long-term foundation of our business, but also the foundation of our lives. ”

Zuckerberg’s comments came as Menlo Park-based Meta reported a $9.4 billion loss from its Metaverse project and predicted continued losses. Critics are raving about Meta’s new $1,500 headset and its virtual world.

Meanwhile, since Musk bought San Francisco-based Twitter, it has been saddled with $13 billion in debt from its acquisition of Musk, and companies like General Mills, Volkswagen and REI have suspended advertising over content concerns. It has been suspended, said a Twitter privacy executive. Stopthe Federal Trade Commission expressed “deep concern” about user data, and Musk Respond with a tear-jerking emoji Bloomberg this week on concerns about impersonation enabled by a new $8 user verification scheme it hastily rolled out. reportMusk told employees that Twitter might go bankrupt.

Blank, of Stanford University, said Zuckerberg’s all-in bid for the headset-based metaverse wasn’t a surprise, noting that he led Facebook’s immersive virtual reality company Oculus in 2014. He has a very consistent vision that has been very articulate about where he believes the future is,” Blank said. “The question is, is he wrong, or is he too early?” Musk said on his $44 billion whim, it looks like he bought Twitter, but he launched his SpaceX. I was. according to the book By former NASA employee Lori Gerber because the Russian rocket designer spat in his shoes. “Resentment and anger, combined with the ability to see what others don’t, can be quite the motivation for entrepreneurship,” Blank said.

Whether the two CEOs acted rationally is another matter. Coates sees Zuckerberg’s metaverse ambitions as a logical response to Facebook’s decline. “Zuckerberg looks at his business and thinks it might die,” Coates said, calling Zuckerberg’s virtual reality bid “a social network to fix his business.” “a semi-desperate approach to finding out what comes after.”

According to Coates, Musk’s acquisition of Twitter is difficult to understand from a business perspective. “My sense is that he saw it and said, ‘I can do so much better than you idiots.’ I’m super rich. It feeds his ego,” he said. rice field. Mr. Coates said Mr. Musk is now “massively mismanaging” Twitter. “It’s true that it was run poorly. But that doesn’t mean it could be what Musk thinks it could be, and it doesn’t mean he understands the industry at all,” he said. Said. “He’s exceptional. It doesn’t mean he’s exceptional at everything.”

What also seems to set the two CEOs apart is Zuckerberg’s trust in his men to help guide and run Meta, with Musk firing Twitter’s former leader, Compared to relying on venture capitalists’ “war rooms,” Coates said. “What I feel is that Tesla and SpaceX, in a way that he’s not doing on his Twitter, he’s delegating to real experts in car manufacturing and rocket science. We are not making the same level of detailed but important decisions as in

Richard Hagberg, a Silicon Valley leadership coach since 1979, said that seeking the opinions of subordinates is a hallmark of successful leaders. “We need people who tell the truth to those in power,” Hagberg said.

Unlike some CEOs such as Apple’s Tim Cook, Zuckerberg and Musk present themselves as the public face of their company for their own benefit, according to a 2021 publication. Ben Little, co-author of The New Patriarchs of Digital Capitalism. The recognition and adoration the two receive as celebrities is part of what drives them, Little said. I’m claiming my rights in the virtual space,” he said. However, Little added, “At some point, this celebrity-driven business model ceases to be an asset and becomes a liability.”

The region’s tech industry is constantly changing. The successes and failures of CEOs, the rise and fall of companies. Russell Hancock, his CEO of the think-tank joint venture Silicon Valley, looks at the ups and downs of Musk and Zuckerberg in a historical context. “That’s what Silicon Valley is about,” said Hancock. “People who hunch, take risks, and bet.”