Mark Pincus: Not only nice guys finish last
Leo "The Lip" Durocher would have understood what drove Mark Pincus, Zynga's former CEO who finally paid a price for his sharp-tongued, sharp-elbowed approach.
"He has built a machine," said Andreessen, an investor in the company. "Google is a tightly wired business machine. Microsoft (MSFT) is a tightly wired business machine. Apple (AAPL) is too. Zynga is very much in the mold of those other companies."
That machine got an overhaul on Monday when the company took over the pre-July 4 news cycle by announcing that Pincus would step aside as CEO in favor of former Microsoft exec Don Mattrick. On paper, it's an odd arrangement since Pincus does not seem to be going any where -- he remains as Zynga's chairman and chief product officer. He also still has more than 50 percent voting control of the company, which leads to interesting speculation. Still, it's hard to believe that someone as high-profile as Mattrick would have left a cushy spot at Microsoft to become a puppet CEO. For now, at least, it seems the days of a Pincus-led Zynga are over and that the reins are in the hands of the new guy.
Wall Streeters who follow the company didn't want to stick the shiv in by publicly badmouthing Pincus, but they were clearly ecstatic about the change. Zynga once had a $9 billion valuation. These days it's $2.4 billion. So it was that Zynga's shares, gobsmacked since the company's 2011 IPO climbed more than 10 percent today in reaction and rose almost another another 4 percent in after-hours trading. You don't need to be The Amazing Kreskin to read between the lines to realize these folks are positively giddy at the news.
Could it have finished any differently? If past is prologue, probably not.
Zynga's founder had famously sharp elbows and he didn't try very hard to make nice for the camera. New York Magazine's parting shot called out Pincus's reign of terror. Hey, the guy reaped what he sowed though somehow, the image of Pincus as a bloodthirsty Robespierre seems slightly more than ridiculous. Still, nobody will shed a tear. Those sorts of caricatures are the price of being an abrasive CEO who also fails to hit earnings expectations quarter after quarter. In this business, you can be a real jerk but if you wow them on the bottom line, you wind up getting lionized.
That's where Pincus came up short. Woefully short.
These guys are like the 1962 Mets. Consistent losers. The big difference is that the Mets were at least loveable. My former colleague Casey Newton's pithy tweet this afternoon framed the issue neatly: "Will Don Mattrick beat the odds and become the first person to ever enjoy working at Zynga?"
This has not been a fun place to hang your hat. Not with Zynga popping out one stinker after another, losing money and firing employees yet always promising better times just around the bend. Of course, the hoped-for turn never materialized as its games got stale and the company failed to keep even with competition from mobile game makers. Meanwhile, morale plummeted as the red ink grew -- Zynga lost more than $400 million in 2011, followed by a $209 million loss in 2012.
All that took a toll. Late last year, in fact, Pincus figured among the worst CEOs in America, according to Sydney Finkelstein, a professor at Dartmouth College's Tuck School of Business.
Give Pincus credit for building something from scratch. Entrepreneurship is tough and even if Zynga did not turn into the hyperbolic machine that Andreessen imagined, Pincus still created something out of nothing and that's admirable. He wasn't a great CEO but had Pincus been more of a mensch, maybe the reviews would have treated him less harshly. Instead, he summoned the spirit of Leo Durocher as he went abound his business.