
The Founder Factor - alexandros
http://www.avc.com/a_vc/2010/01/the-founder-factor.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+AVc+%28A+VC%29&utm_content=Google+Reader
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mattmaroon
While, as a founder I'm loving this idea, I'm pretty sure an omnipotent
startup diety could point out 10 where the founder ran it into the ground for
every one that succeeded. Michael Dell's comeback has been a noteable failure.
The problem here is a sample bias, as it doesn't make for the sort of story
that Jobs/Apple has going. That's a real-life movie of the week right there.

There are probably plenty of cases where non-founders were instrumental in
success too, in fact Google may be one. Schmidt has undoubtedly been
instrumental in Google becoming the juggernaut it is.

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dennykmiu
Google is a unique company and its Founders are in a unique vantage point that
I doubt that many of us struggling entrepreneurs would share. However, this
article is a thought-provoking good read for anyone who is a Founder/CEO of a
startup, who are both the owner and the executive. In fact, in the beginning
of the startup, being the Founder means that you own 100% of the company but
at the same time, you are also its first employee. Interestingly, these two
distinct roles provide two different and potentially conflicting sets of
responsibilities. As an owner, your responsibility is to yourself and your
family and you are free to make any political statement that you wish to make.
On the other hand, being an executive means that you have accepted a fiduciary
duty and the mandate to protect the interest of your shareholders. In any
case, I beleive Google leaving China would be a devastating blow to the
Chinese citizens AND to the Google shareholders.

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sethg
I think one could make two strong arguments that Google leaving China makes
good _business_ sense, and is not just a warm-fuzzies thing.

First of all, whoever broke into Google’s servers and collected confidential
data from them made Google look like a chump. Given that Google’s long-term
business plans seem to involve convincing lots of people to entrust even more
sensitive data to Google’s servers, Google has a strong interest in not
looking like a chump.

Second, if the PRC government has veto power over what search results Google
can show, and Google’s ability to compete depends on the quality of its search
results, and the government favors Chinese-based companies that it can control
more closely... perhaps the deck is just so stacked against Google that it
would get more ROI doing business in a less authoritarian country.

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dennykmiu
Google is still the most open search engine in China. In some way, Google is
the Voice of America. Should we have shut down VOA just because the other side
decides to jam our signal? By the way, I should have edited the end of my
comment to say that it is devastating to the Chinese citizens in the short run
and devastating to the Google shareholders in the long run since currently
Google is getting less than 1% of its revenue from China, so shutting it down
really doesn't hurt Google's bottomline. In any case, I grew up in communist
China and had lived on the other side until I was a teenager and I really
appreciate the benefits that even an suboptimal communication channel would
bring to the Chinese people. The alternative is simply unacceptable.

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fnid
Google's board and executives have a fiduciary responsibility to the
shareholders to do what is in the best interest of shareholders -- not Chinese
dissidents. It doesn't matter if those executives are founders are not.

All the warm and fuzzy about leaving China won't stop shareholders from suing
google if it turns out a decision to leave China has impacted them negatively.

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kylemathews
That was Fred's point -- Sergey and Larry hold a controlling stake still in
Google. So Google's best interest is still to meet _their_ best interests
which aren't necessarily financial.

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andrewparker
Sergey and Larry hold a controlling stake because there is a dual class of
Common stock where the Founders' stock has 10x the voting power per share
compared to normal Common stock.

Sergey and Larry have something like 30% of the equity combined but held 85%
of the voting power.

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JoeAltmaier
Does "fiduciary responsibility" mean "represent the voting stockholders" or
"represent all the stockholders"? I believe the latter. Which puts executives
in a bind when those two populations differ.

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daniel-cussen
I believe by "voting power" he means the voting power _if everyone turned up
to vote._ That's a shitload a stock, huh?

