Two of the world’s most recognizable brands, and two of the most celebrated people in Silicon Valley. But the struggles at Tesla And Facebook had perhaps been a long time coming and the companies could be changing forever.
The two gentlemen may have little in common, but Mark Zuckerberg, co-founder and CEO of Facebook and Elon Musk, the co-founder and CEO of Tesla could be forgiven for wondering if they could help each other out with some tips on how to deal with a situation where bad news is all encompassing. The two aren’t exactly friends. One instance of their no-love-lost is from the summer of 2017, when the two had a war of words—let us just summarize—Zuckerberg is optimistic about AI, while Musk isn’t.
Fast forward to the present. Elon Musk has had to step down as the chairman of Tesla and pay fines to the tune of $20 million, Facebook has revealed that it has been hit by a massive data breach. While they may very well find each other’s shoulder to cry on, the reality is that Tesla and Facebook, as we know it, could very well be changing in front of our eyes.
So, what exactly is happening at Facebook?
Facebook has already had a very bad year, and it is just getting worse. First came the Cambridge Analytica scandal revelations in March, as it emerged that the data firm had kept that large chunk of data collected from more than 50 million Facebook users. Mark Zuckerberg ended up in front of the US Congress. Not soon after came the news that the Facebook Messenger app, without your knowledge, had been logging all the calls and messages sent and received on Android devices.
If user confidence hadn’t already been seriously dented, last week could in many ways have brought with it the knock-out punch. Kevin Systrom and Mike Krieger, the co-founders of Instagram, a platform now owned by Facebook, announced that they were leaving the company. In June, Instagram had crossed the one billion user mark, and was expected to clock up as much as $6 billion in advertising revenue this year, which would have made it the second biggest revenue source after the Facebook News Feed. If ever there was a case of great timing, WhatsApp’s co-founder Brian Acton took the same week to mention how him and Jan Koum left Facebook. In both cases, there were a series of disagreements with Zuckerberg, it is being suggested. And then comes the big one—Facebook now faces a $1.63 billion fine in the EU for the latest data breach, reported last week, which potentially suggests that a badly configured “View As” feature allowed hackers to access the login tokens of as many as 90 million Facebook users.
Is Tesla faring any better?
About 10 miles down the road, Elon Musk has had to step down as the chairman at Tesla Inc after the Securities and Exchange Commission held up Musk for fraud. The settlement includes $20 million in fines as well. Why? Musk made an attempt to take Tesla private in a series of avoidable Tweets, perhaps knowing fully well that funding wasn’t secured—and what followed were charges of fraud. This comes after troubles with the production line for Tesla cars, and the company still unable to match the supply to the demand, even though Musk cracked the whip in the summer and set a weekly production target for certain Tesla cars.
But how did it come to this?
There should be no doubting the fact that Facebook and Tesla’s trials and tribulations stem from one common element—the single minded pursuit for complete control, the practice of isolating threats and the craving for devotion to the mission. Zuckerberg’s personality traits were perhaps betrayed by the company’s moves over the years, as it acquired WhatsApp and Instagram, and also made life quite difficult for Snap and Twitter (Snap in particular). Beneath the geek boy persona that we saw at the hearings in front of the lawmakers, sits a very ruthless professional who would not give up till the targets are achieved. Systrom, Krieger, Koum and Acton probably didn’t always look at a mission with the same glasses as Zuckerberg. Read what you may want to of it, but Chris Daniels, the now CEO of WhatsApp, and Adam Mosseri, expected to become the next boss at Instagram, are considered to be quite close to Zuckerberg.
In the same vein, Musk too has tried to put a structure in place that doesn’t allow for multiple power centers. Tesla’s board of directors includes his brother Kimbal, while many of the other directors have ties with the billionaire’s SpaceX company. Over time, he has dismissed shareholder calls for an independent chairman and has been quite outspoken on various matters, particularly on Twitter.
While the top-down control methods of Zuckerberg and Musk may have worked all this while, they don’t seem to be very effective anymore. Both companies, Facebook with the data breach and Tesla with the production difficulties, need a more open system in place for new methods, fresh ideas and different solutions to get out of their current individual predicaments. Nevertheless, it may be too soon to expect anything on those lines. At least at 1 Hacker Way, Menlo Park and at 3500 Deer Creek Road, Palo Alto, for the time being. Which could perhaps mean an evolution for the two tech giants. Though too early to say yet, whether for the better or for worse.
Article By Vishal Mathur