Silicon Valley entrepreneurs like to talk about their hopes of "changing the world." Yes, of course: Changing the world from one in which they are poor to one in which they are fabulously wealthy. The question in the air is whether the founders of companies do a better job at creating wealth, for themselves and their investors, than professional managers. With Yahoo announcing Jerry Yang's plans to step down as CEO, it would seem like a losing time for founders. But Yang is an exceptional case; he took his hands off the steering wheel when Yahoo had a mere five employees, and never really ran anything until he stepped in as CEO last June. Most founders of successful startups eagerly seize power, and have to be forcibly dislodged from the driver's seat. The best never let go. Just take a long-term look at the stock market, and you'll see why.
Apple, where cofounder Steve Jobs returned to power in 1998, is up 600 percent since the beginning of 2002. Amazon.com, where Jeff Bezos has reigned as CEO more or less uninterruptedly since the online retailer's founding, tripled its worth. Google, where cofounders Larry Page and Sergey Brin form a troika with hired-hand CEO Eric Schmidt, has also tripled in value since its inital public offering in 2004. These gains remain despite the stock market's punishing fall. What about Yahoo, eBay, and Microsoft, where founders handed over the company to professional managers? They are all back where they started almost seven years ago. Under former CEO Terry Semel, Yahoo had a brief golden age in 2004, where it outperformed all the other big Internet companies; it ended just as Google began its relentless rise. Meg Whitman overstayed her welcome at eBay, presiding over its stagnation before handing over the CEO job to John Donahoe — like Whitman, also a management consultant by training. Microsoft CEO Steve Ballmer has proven that he's no Bill Gates; the stock has flatlined under his leadership. Under Yang, the stock has gone down, down, down, interrupted only by the hope that Microsoft might buy the company and in so doing, give its employees the leadership and sense of purpose they so desperately crave. Does that disprove the value of founders? No. Rather, it suggests that by abandoning his company when it was merely a toddler to be reared by strangers, that he was never much of a father figure to begin with.