The countdown is on- we need to raise $200,000- help us reach our goal by midnight. Donate Now

When company founders fly the coop

Adriene Hill Jan 18, 2012

Adriene Hill: The co-founder of Yahoo is out. Jerry Yang announced he’ll cut ties with the tech company. The former CEO helped make the Internet as we know it today, but he’s been weighed down by his decision not to accept a $40 billion merger with Microsoft. There’s a sense that Yang’s departure could pave the way for a new path forward for Yahoo. And the news got us curious about the role of company founders in letting a company to grow.

For more we’ve got Howard Anderson on the phone. He’s a senior lecturer at the MIT Entrepreneurship Center. Good morning.

Howard Anderson: Good morning.

Hill: So when does a founding CEO become more of a problem than a help for his or her company?

Anderson: Rarely is someone a great entrepreneur and also a great manager. Usually you excel at one, and someone else excels at two, because it takes a different skill set. Two graduate students at Stanford are not necessarily the people to run multi-billion dollar companies. There are exceptions. Bill Gates comes immediately to mind.

Jerry just made his stay too long, and I think turning down Microsoft is going to go down in technology history as one of the four or five stupidest decisions that a CEO has ever made.

Hill: Is tech different than other industries when it comes to this sort of thing?

Anderson: It is different. Things happen faster; you snooze, you lose. If I’m in a prosaic business — I’m making chairs, I’m making whatever it is I’m making. I’m General Mills, or whatever. Yeah, things change, but they really change quickly here. You can be up one Monday, miss the curve on Tuesday, and be essentially luncheon meat on Wednesday.

Hill: So with Jerry Yang out back at Yahoo, is this problem solved?

Anderson: No. The problem’s not at all solved. The hardest job in all of technology is to turn a company that is on a downward spiral, and bring in CEOs. It’s kind of like a baseball manager when the team is struggling. So we’ll see — this is going to be a very, very difficult thing to do. You would love to have a CEO that has that ability to do both jobs, but Jerry isn’t it.

Hill: Howard Anderson is a senior lecturer at the MIT Entrepreneurship Center. Thanks so much.

Anderson: My pleasure.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.