Mark Zuckerberg has once again seen off founders of one of the companies Facebook bought over. Instagram co-founders, Kevin Systrom and Mike Krieger have resigned as chief executive officer and chief technical officer of the photo-sharing app owned by Facebook.
The founders are leaving barely six months after WhatsApp’s founders Jan Koum and Brian Acton quit the US social media group. In both cases, the founders clashed with Mark Zuckerberg, chief executive officer of Facebook.
“The Instagram journey is one I won’t forget. It started by building simple products that solved universal problems,” Systrom posted on his Twitter account. “Now eight years, we look back and are proud and grateful to have been part of that journey.” He added that he will be taking some time off before starting a new venture.
Facebook has also seen the exit of Palmer Luckey, co-founder of Oculus VR another big acquisition, 18 months ago. Effectively the founders of its three biggest acquisitions have exited the company.
Citing sources, Josh Consine, Tech Crunch’s Editor at Large noted that “Zuckerberg and Systrom had a historically strong relationship, but clashed because “Mark wanted content production on instagram to flow to Facebook.” Tension between them grew, contributing to Instagram’s founders resigning.”
He further noted that a warning flag was the departure of Instagram chief operating officer Marne Levine to Facebook earlier in September. The COO is believed to have held Instagram together,
And without a strong replacement to stick up for its priorities, Facebook could step in more and more.
Zuckerberg’s response to the resignation was a post on Facebook “Kevin and Mike are extraordinary product leaders and Instagram reflects their combined creative talents. I’ve learned a lot working with them for the past six years and have really enjoyed it. I wish them all the best and I’m looking forward to seeing what they build next.”
The exit of the founders has spurred several comments from leaders in the African tech scene as it speaks to known conflicts between investors and founders. There are lessons that could be drawn from the comments that have followed the story.
How much is too much to give?
At the time the founders of Facebook subsidiaries were signing the acquisition, it probably was not in doubt that Mark Zuckerberg genuinely loved their products. But was he sold on their view of the future of Instagram?
Systrom and team made good money pocketing $1 billion from the sale of Instagram including $700 million in Facebook stock, which today is worth nearly $4 billion. But they lost control of the company the moment they signed on the dotted lines.
Unless a founder has decided retaining some amount of control over his businesses isn’t his problem, it is always important to put that in to consideration when releasing equity.
“Any entrepreneur who has raised money from investors is basically a high level employee,” Mary Remmy Njoku, co-founder of online movie streaming platform, Iroko TV posted on Twitter through her spouse Jason Njoku. “It’s quite sad that they go around fooling themselves (with investors pushing) that they are founders in control. They are not. They only find out when they try to exert control.”
What being a CEO truly means
Ben Thompson, author of Stratechery, a subscription-based newsletter makes the point that Systrom was not technically the CEO of Instagram. A CEO, for him, is a person that has a company that can stand on its own.
Mark Zuckerberg was the CEO of Facebook indeed, in title and in practice, “To be CEO – to have control – is, at least in the long run, not simply about building a great product. It is about finding and developing a business model that lets you determine your own destiny.”
Chinaza Onuzo, producer of Wedding Party 1 &2 and other movies and vice president at African Capital Alliance also buttressed the point in a tweet response to Mary Njoku.
“My favourite founders are the ones who understand that CEO is a job and not a birthright. I find that those are the ones that tend to succeed. Founders that refuse to be measured from a performance perspective tend to underperform,” he noted.
Be willing to step back and move on
“We are planning on taking some time off to explore our curiosity and creativity again,” Systrom said in a statement on the Instagram blog. “Building new things require that we step back, understand what inspires us and match that with what the world needs; that’s what we plan to do.”
Founders and their investors clash all the time. It is the inevitable story of two separate people with different ideas coming together to build a business. You have a choice to allow the investor with the money to have the sense that he won by stepping back while you seek other ways to get small wins stay inspired. The alternative is to take the highway.
