Big Tech struggles in 2022: stormy seas, different boats

The crisis at Silicon Valley is certainly not existential: with tens of thousands of employees laid off and more controversial ideas ditched, tech giants will adapt and survive. Questions about managerial style remain, though.

Take Elon Musk. After acquiring Twitter, the billionaire has rushed to publicly ruminate about free speech, dismantle content moderation teams, and publicly – and wrongfully – insinuate a former company executive was a pedophile.

Musk, who now tweets more than 25 times a day on average, also fired half of the company’s employees, and about a thousand of them left on their own will when asked to go hardcore or go home.

Such a tumultuous tenure has hit Twitter, where many big advertisers are freezing spending. Some of them are coming back but the Musk brand has clearly suffered because many consumers are now also turning sour on Tesla, Musk’s most important company.

Its stock is down almost 50% since Musk bought Twitter at the end of October, and, for a few hours, he had even lost the title of the richest person in the world.

The age of the visionary CEO

Other tech billionaires are also facing trouble. Meta’s Chief Executive Officer Mark Zuckerberg recently had to apologize for over-investing in his beloved metaverse, but his “I got this wrong” message came with the news that the company was letting more than 11,000 employees go.

Meta’s stock price also plunged by more than 70% at the end of October. Although it bounced back later, the drop over the whole 2022 was 65%.

Meanwhile, Jeff Bezos, although perfectly fine personally as he’s flying to space and appearing in Star Trek Beyond, sees his Amazon empire crumble under rising inflation, lower consumer spending, and changing shopping habits. The company is now expected to cut as many as 10,000 jobs.

Many now ask whether these tech wizards should be smarter in taking care of the business side of things rather than playing around and focusing their attention on costly ideas.

Apple's CEO Tim Cook. Image by Shutterstock.

The cases of Alphabet, the parent company of Google, and TikTok show it’s more than possible to successfully develop a technology business without proclaiming grand, visionary ideas about saving the world.

Finally, there’s the behemoth of Apple, where Tim Cook excels as a quiet master strategist who constantly beats Wall Street expectations and is seen by the wider public as a responsible and trustworthy business leader – even though Musk and Zuckerberg have been attacking the company’s policies.

Cybernews reached out to experts and tried to gauge their mood about the best way forward for big tech companies – what works best, high-profile executives or low-key, geeky professionalism? Opinions vary – as they probably should.

“The best Big Tech stewardship is someone who is the positive, affirming public face, with someone else ultimately in charge of the numbers and business trajectory. Twitter doesn't have that, nor does Tesla, as far as we know,” Aron Solomon, Chief Legal Analyst at Esquire Digital, a digital marketing agency, told Cybernews.

However, Jeff Kagan, a technology industry analyst, stresses that there is a difference between visionary founders and executives who run and build an organization.

“Only a few leaders are good at both. Visionaries like Musk, Bezos, and Zuckerberg created something out of nothing, and they love to fly close to the sun – that’s a thrill most of us will never understand,” Kagan told Cybernews.

“The age of the visionary CEO will never end. It has been with us from the days of Rockefeller, Carnegie, and Ford, continues today with Musk, Bezos, and Zuckerberg, and will continue with the next chapter of American business moving forward.”

Quiet leadership at TikTok, Apple, and Google

TikTok’s CEO Shou Zi Chew, 39, is not someone whom you would easily recognize in the street. But his company is doing really well – as other tech firms are laying off thousands, TikTok is recruiting those same workers and planning to double its workforce.

The app, although surrounded with controversy, is the most downloaded of the year: two billion people use it. TikTok is on track to earn $12 billion in revenue in 2022, according to the research firm eMarketer – this is more than Twitter and Snapchat combined, by the way.

Chew is what one would call a great example of low-key professionalism. He works hard, doesn’t care about self-promotion, publicity stunts, or even his public image too much – and it seemingly pays off.

“When there is a crisis in the company, the media and the public expect the CEO to be the one to deal with it. This used to be the job of the Chief Marketing Officer, or the head of Human Resources, but now it is the job of the CEO,”

Matthew Ramirez, founder of Rephrase Media.

We’ve already mentioned Google and Apple as other case studies of how the long game excels, and Matthew Ramirez, an investor and founder of Rephrase Media, a company developing AI applications, agrees.

“Low-key professionalism actually enhances a company’s image. For example, Tim Cook is known for being incredibly low-key and professional, despite being in a very high-profile role. This has led many to view Apple as a company that is run by professionals who know what they’re doing, and it has contributed to its success as a company,” Ramirez told Cybernews.

He thinks that the era of the glorified tech CEO might be coming to an end. It was always a high-profile position, but the media coverage has elevated it to new heights, and much of the public now seems to expect some magic solutions from that single CEO.

“When there is a crisis in the company, the media and the public expect the CEO to be the one to deal with it. This used to be the job of the Chief Marketing Officer, or the head of Human Resources, but now it is the job of the CEO,” Ramirez said.

“In many cases, these leaders are not good at handling the media, and they are not good at dealing with crises. Instead, they would rather focus on their products and technology. This is why we are seeing so many tech CEOs step down in recent years.”

Of course, it’s a price they have to pay: if you’re well-known, public attention to whatever solutions you offer will always be higher, and your public persona affects how customers feel about those decisions. This can become a distraction and even lead to a backlash.

Too rich to care?

Enter Musk, Zuckerberg, and Bezos. Does, for instance, the Tesla CEO know what he wants to do with Twitter, where he laid off thousands and keeps saying only a few algorithms will supposedly save our civilization, even though a plethora of industry professionals highly doubt it? Is this the way to go, anyway?

Maybe. Or maybe not. Some of the experts Cybernews talked to have no doubt Musk is overreaching – they’re sure there’s no world where jumping from one wild crisis to another is normal. Others, though, say this is precisely Musk’s comfort zone.

“The issue with Musk is that we don’t, and maybe even he doesn’t, know his end game with Twitter. Personally, I think he's trying to drive the company into legal restructuring (bankruptcy or the like) to do what he really needs to do, which is to dramatically lower his $1 billion per year Twitter debt load,” Solomon told Cybernews.

“But there’s also the omnipresent possibility that Elon Musk has no idea what he’s doing here. These tech billionaires are insanely acquisitive. They never think they have enough, and their desire to acquire more and more before they die clouds their vision as to where the sun is actually located. Yeah, it's pretty warm on the flight, but they always know better.”

Of course, as Alaa Negeda, Chief Technology Officer at AlxTel, a US company developing IT services for multi-user operations, points out, “flying close to the sun might seem like a good idea when you’re a tech billionaire, because you're too rich to care about your company, and the sun's heat doesn't bother you as much as it would someone who has to worry about their 401k.”

“But there’s a dark side to this mentality. These billionaires are flying close to the sun because they're too obsessed with themselves. They don't care about their companies, or their employees, or their customers. They're only interested in themselves and their own profits,” Negeda told Cybernews.

Elon Musk
Twitter's CEO Elon Musk. Image by Shutterstock.

Each case is different, though. For example, critics point out that Zuckerberg’s pricey dally with the metaverse was a wrong business decision because Meta’s core competencies are simply elsewhere.

And Bezos’ Amazon has been a company that aimed to expand market share, even at the expense of profits, since the very beginning, and is now seeing future growth limitations.

But the key point doesn’t change: Daniel Chan, Chief Technology Officer at Marketplace Fairness, a website covering traditional finance and cryptocurrency, sees many possible motives behind some of the tech moguls’ recent behavior, and narcissism still stands out.

“Yeah, they may feel that they need to take risks in order to stay ahead of the competition. But they may also feel that they need to be flashy and extravagant in order to garner attention and admiration,” Chan told Cybernews.

“Finally, they may feel that they are above the law and can do whatever they want – for instance, try to compensate for lack of business acumen by making high-profile and flashy moves. In some cases, executives can lead to disaster as CEOs may be more concerned with their image than with actual business.”

Michael Chepurnyak, founder and CEO at Ein-des-ein, a web and mobile app development company, thinks that the time for high-profile loud marketing and screaming actions is over for giant tech companies.

“Users’ information space is overloaded with ads, news, big headlines, and all they would like to receive now is a quality service without additional glitters. If a person needs a car, his priority is to drive safely, that’s it. Companies where everything constantly fluctuates up and down, are unstable,” Cherpurnyak told Cybernews.

“On the other hand, companies that run smoothly without excesses survive the most difficult times. That’s why we do not hear any news about Google’s top management. They use well-known methodologies and approaches, including those related to successful employee management.”

Sailing in high winds

Yet, what helps Google, TikTok, or others, doesn’t necessarily suit the outsized personalities of Musk, Bezos, or Zuckerberg, Joe Karasin, Chief Marketing Officer at CircleIt, a social media platform, points out.

Other experts and industry professionals also seem to think high-profile CEOs simply cannot run their companies in any other way – and that’s actually a good thing.

“Musk has a management style that media types don’t particularly agree with, but he’s been on the cutting edge for the entirety of his career. His high profile executivism is, in large part, what has built Tesla into what it is today,” Richard Gardner, founder and CEO of Modulus, a technology product provider, told Cybernews.

In other words, the risk is a necessary step if one wants to build something. Musk might be drowning in media-generated negative noise, but SpaceX and Tesla are in essence his passion projects that have blossomed despite severe undervaluation and misrepresentation for many years.

“Elon was the futurist before it was cool, and others are following in his footsteps. He has proven the strength of Tesla through this economic downturn as sales numbers remain strong while other car companies flounder,” Eric Alexander, founder and CEO at Soundscape VR, told Cybernews.

“He has turned Tesla into a status symbol like the iPhone, and because of that Tesla is only down 50% off its bubble while Meta is down 77%. And he's not abandoning his core business like Zuckerberg.”

However, even if rough seas make stronger sailors, Alexander wouldn’t mind if the big tech market calmed down. He’s not happy with the idea that companies need to chase exponential growth forever.

“That's not possible, yet it is what investors are demanding and the expectations they are placing on the company. It leads to the companies making all sorts of silly decisions to make sure you don't miss on even a single quarter, lest your stock price be gutted. This causes downstream effects where many tech CEOs put short term profits over everything, prioritizing advertisers at the cost of free speech and what is good for their users and society in the long term,” Alexander said.

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