'Cult of founders' is becoming a real problem in Silicon Valley: Roger McNamee
Tesla CEO Elon Musk's controversial behavior is indicative of a larger
issue facing Silicon Valley, tech investor Roger McNamee told CNBC on
Friday.
"The cult of founders has become a problem," the co-founder of private equity firm Elevation Partners said on "Squawk Alley."
"There's no question that great founders make great start-ups, but once a
company is in the public market, once it begins to mature, it has other
responsibilities," he added. "You need to have in the team people who
can fulfill those responsibilities."
Elon Musk's recent tweet mocking the Securities and Exchange Commission
has caused some investors to question whether founders can succeed as
the CEO of a company.
In the tweet, Musk called the agency the "Shortseller Enrichment
Commission," just days after settling fraud charges brought against him
by the SEC. The tweet, and a subsequent note by short seller David
Einhorn, caused Tesla shares to drop on Friday.
Another Silicon Valley darling, Facebook, has also been under scrutiny
recently. The social media giant and its CEO, Mark Zuckerberg, have been
dealing with fallout over several issues, including the Cambridge
Analytica data scandal and its role in the spread of misinformation
during the presidential campaign.
Then, last week Facebook announced a major security breach. And
Thursday, the company admitted it "made mistakes" after a top executive
was seen attending Judge Brett Kavanaugh's congressional hearing,
reportedly prompting outrage from employees.
As an early investor in Google and Facebook, McNamee has seen firsthand
the responsibility and importance of the company's board and how that
organization should wield its power.
"You need to have checks somewhere in the system, but increasingly
Silicon Valley companies have two classes of stocks so that the founders
retain control and nobody has any leverage," he said.
And those in control are not used to having anyone criticize them, he added.
"They are not very good at hearing constructive criticism, embracing it and making the future better than the past," he said.
Continue Reading
Join Geezgo for free. Use Geezgo's end-to-end encrypted Chat with your Closenets (friends, relatives, colleague etc) in personalized ways.>>
No comments