Leaning Out: Sheryl Sandberg logs off Facebook

Sascha: [00:00:02] From Equity Mates media. This is the dive. I'm your host, Sascha Kelly. Last week, Sheryl Sandberg shocked the world. 

Speaker 2: [00:00:08] Sheryl Sandberg is stepping down after 14 years at Facebook. 

Sascha: [00:00:13] Chief operating officer of Meta, formerly Facebook announced that she was stepping down from the company after 14 years at Mark Zuckerberg's side. And reports of her closeness with Zuckerberg. They're not exaggerated. When she started the job, she asked for three things that they would sit next to each other, that they'd meet one on one every week. And for honest feedback. When he thought that she'd make something up, Mark agreed to all of it on the condition the feedback would have to be mutual. In the midst of extraordinary change at Facebook in the last 14 years, Sheryl Sandberg has been at the centre of it all. It's Monday, the 6th of June. And today, I want to know what does a post Sandberg world look like at matter and what will she do next? To talk about this today. I'm joined by my colleague and the co-founder of Equity Mates Alec, Renehan. Alec. Welcome. It's nice to see you. After a week away, you did a great job last week. 

Alec: [00:01:09] Thanks, Sascha. I am glad you're back in hosting duties. The pressure is off my shoulders once again.

Sascha: [00:01:16] Now the pressure is on because you going to tell me all about Sheryl? So before we look forward, let's look back. Cheryl has had an incredible career at Facebook, one worth celebrating and one worth talking about. So for those of us who don't know a lot, tell us about it. Give us the elevator pitch. 

Alec: [00:01:31] It's said that Zuckerberg built a product and Sandberg built a business. And it is an incredible career that she's built and an incredible company that she's built. When we talk about her career, I think we can really break it up into three parts. The first, Silicon Valley's rising star from before her time at Facebook, too, when Facebook IPO'd in 2012. Then there was the lane in era. That was when Sandberg found herself a feminist icon with the publishing of her book, Lean In. In 2013, women. 

Audio clip: [00:02:03] Have been 14% of the top jobs in corporate America for ten years. Ten years of no progress. 

Alec: [00:02:10] And then the third part, the political fallout, which was the post 2016 election to now controversy after controversy.

Audio clip: [00:02:18] We didn't take a broad enough view of our responsibility, and that was a big mistake. 

Sascha: [00:02:23] All stories, they say, are supposed to have a good three act structure, and those are three juicy acts. Personally, I only became aware of Sheryl in the Lean in era, which we'll talk about in time. But let's go to the pre IPO section. 

Alec: [00:02:38] So before joining Facebook, Sandberg was already a rising star in Silicon Valley. She was a young executive at Google running Google's advertising operations. She joined there in 2001. So it's still pretty early days at the search giant right in the middle of the tech wreck. So you got to have some confidence to go to Google in 2001. But before then, she had worked at McKinsey and in America's Treasury Department. She was the chief of staff at the Treasury. 

Sascha: [00:03:04] Pretty good CV so far. 

Alec: [00:03:05] Very impressive CV. When she joined Facebook in 2008, it was still in its infancy. She was often called the adult in the room early days because it was a bunch of 20 something year old coders building a product. Zuckerberg himself was 23 years old and he had built a viral platform. There was no denying that Facebook was an incredible story, but it wasn't really a business model behind it. So Sandberg flourished in that role of building the business, and Facebook flourished with her. She masterminded the firm's growth as an ad platform. By 2010, Facebook was profitable. By 2012, Facebook IPO'd it was worth $46 billion and was bringing in $5 billion in revenue a year, most of it from advertising. Sandberg was largely responsible for that. 

Sascha: [00:03:54] Those are extraordinary metrics and like a real testament to her skill. So that was Act One from Rising Star to Facebook IPO. Now tell me about Act two, the Lean in ERA. This is one that I personally remember all too well. 

Speaker 5: [00:04:08] So did you teach yourself to lean in?

Alec: [00:04:10] So by 2012, Sandberg was incredibly well known, and Facebook was the company on everyone's lips. Then in 2013, she writes Lean In, which was a book about, I guess, the obstacles women face in the workplace and how she thinks they need to lean in and overcome them. 

Sascha: [00:04:28] I would say it led to lots of fierce book club discussion. Okay, that's my kind of memory of, I think, a. 

Audio clip: [00:04:33] World that was run where half of our countries and half of our companies were run by women would be a better world. 

Alec: [00:04:40] Yeah, right. Okay. Well, look, I haven't read it, so perhaps you're better to talk about this part of it live. But I think the long and the short of it is she became a business celebrity. She became a feminist icon. And she became one of the most famous business executives globally. To give you an idea of how famous she was suddenly being spoken about as the next CEO. Of Disney or for a role in a potential Hillary Clinton administration, perhaps even a vice presidential candidate.

Sascha: [00:05:07] We need leadership and we need her leadership. So that takes us to the third act, the 2016 election and all of the controversy since. That's fascinating to think of now when you put vice presidential candidate for Hillary Clinton's administration right next to what we all know happened in the 2016 election.

Alec: [00:05:26] A real sliding doors moment. And some may say that Facebook were the ones sliding those doors. But look, I don't think we need to take the time to talk about the controversy sort of happened post 2016. Most people, myself included, are sick of hearing about them.

Audio clip: [00:05:40] So Facebook acknowledged yesterday that most of your 2 billion users could have had their profile, their personal profile information harvested, stolen. That is a stunningly damaging piece of information, isn't it? 

Alec: [00:05:54] Cambridge Analytica, Russian disinformation. Fake News. More recently, we've had vaccine, misinformation, the Rohingya genocide, the cryptocurrency, Libra whistleblowers.

Sascha: [00:06:04] You're playing all the hits there. You just line them all back to back. 

Alec: [00:06:07] Yes. So we know how these stories played out externally. We know that there was congressional hearings. We know there was the hashtag Deletefacebook movement. We know that there are now proposed laws that are trying to kerb Facebook's power or break it up. And we know that there's been court cases in the U.S. about it. Here in Australia, we had the news bargaining code that came about trying to kerb Facebook power. But for this story, this story about Sandberg and what's next for Mirror, what matters isn't the external reaction as much as the internal reaction, because it's been never confirmed but extensively reported that Zuckerberg blamed Sandberg for many of these controversies advertising, privacy, content, moderation. They were all overseen by Sandberg. 

Audio clip: [00:06:48] We know that we did not do a good enough job protecting people's data. I'm really sorry for that. And Mark's really sorry. 

Alec: [00:06:55] The division of labour between these two was Zuckerberg famously has said Sandberg handles things I don't want to. And basically all Zack wants to handle is engineering and products. 

Sascha: [00:07:05] I mean, it sounds like a dream work life in a way. Don't we all want a sidekick? It just looks off to everything we don't want. 

Alec: [00:07:11] That's it. That's it. But there were reports of a 2018 meeting between the two where Zuckerberg said he blamed Sandberg and apparently she thought she was going to be fired. She wasn't. But I think the relationship really started to fray in those years. Author Steven Levy wrote a book about Facebook when he interviewed Zuckerberg, he asked if he thought Sandberg had let him down. Zuckerberg paused, offered a non-committal response. I think there was an implication there that he thought she had. So that kind of gives you a sense of the relationship at that time. And this relationship was breaking down while Facebook was in the middle of the political spotlight, and this was also a source of tension. Sandberg had been cultivating relationships with the Democratic Party for years. She was spoken about as a potential vice presidential candidate, and this all crumbled because Zuckerberg really sought to allay the concerns of the Republicans in the post 2016 Trump era. Sandberg had been in charge of political lobbying, and she was incredibly effective when Obama was in charge and the Democrats were in power. But that all crumbled as well. And so Zuckerberg started to look elsewhere for sort of political counsel. The former British deputy prime minister, Nick Clegg, really took that over from Sandberg, and that was really the story of that time. Some of Sandberg's responsibilities started to get farmed out to other Facebook executives as the Zuckerberg Sandberg relationship broke down. 

Sascha: [00:08:37] So that's 2018, though, and she's been working there for another four years. You know, it's 2022. So why has she suddenly decided to quit last week? 

Alec: [00:08:46] That is the question on everyone's lips, Sascha. 

Audio clip: [00:08:48] And it really is about how I will spend my time. Not so much. I believe in the company. I believe in the company as much as I ever did. 

Alec: [00:08:55] According to Sandberg and to Meta, she was feeling burnt out after 14 years at the company, and that's completely understandable. I've never spent 14 years at anything. I feel burnt out after. 

Sascha: [00:09:06] Four, maybe 14 years with a phone number. That's the longest relationship I've had. 

Alec: [00:09:11] But according to the Wall Street Journal, there may be some other factors that went to the timing of this announcement. Apparently, reportedly matter have opened an investigation into Sandberg's use of company resources to plan an upcoming wedding. And The Wall Street Journal also contacted Meadow recently to ask questions about allegations Sandberg pressed a UK tabloid to shelve an article about her former boyfriend, Activision Blizzard CEO Bobby Kotek. Now, to be clear, the company denies these two stories had anything to do with the timing of Sandberg's resignation. But I guess the story's to watch now. Sascha, one thing I like to do when a CEO is hired or is fired or resigns is look at the share price movement because the stock. Mark. It can be a bit of a popularity contest at a time like this. If you quit and the share price goes up, that's an ego hit. That means that investors are happy that you're out the door. Similarly, if the share price falls when you resign, it means investors are sad to say you go. So you get a sense of was I liked by the market and we can confidently say that Sandburg was liked by the market met us share price fell 3% on the news. 

Sascha: [00:10:24] All I can think of is I'm glad Equity Mates isn't public yet so that if I ever quit I won't get to find out. But that's really interesting. I mean, such a fascinating career. We could do, you know, ten part podcast series about what Sheryl Sandberg's done in her time at Facebook. But I think you did a really good wrap up there. But I think what we really want to talk about today as well is what this means for matter moving forward. So let's talk about that after the break. 

Audio clip: [00:10:54] So first of all, I would give a huge amount of credit for this working to Cheryl. I think she is an amazing person.

Sascha: [00:11:00] Welcome back to the dive, we're digesting the news today that one of the most senior females in Silicon Valley and one of the most successful non founder executives is stepping down. Sheryl Sandberg is leaving metter. So let's turn to the company that she leaves behind. Can we learn anything about where Metter is going by her exit? 

Alec: [00:11:19] Well, Sascha mehta is at a crossroads. He is just a few of the challenges they're facing. Tik Tok is taking away their users, especially younger users. Apple's privacy changes are hurting ad revenue. Zuckerberg is all in on the metaverse. Politically, Facebook remains toxic. Lawmakers in the U.S. want to break the social media giant up. The company was worth $1 trillion in September last year. Now, after the share price has fallen 50%, it is worth $500 billion. It's tough out at the moment.

Audio clip: [00:11:52] These last few years have been brutal for Facebook and the broader Meta portfolio. 

Alec: [00:11:56] But look, you asked me where matter is going, and I think it's in the nine. Metta has gone to the metaverse. 

Sascha: [00:12:01] Yeah. As soon as you said Zuckerberg, the founder, is all about the metaverse. I mean, it's a founder led company. You know, that's the direction it's going to go in. And it's only a matter of time before Metaverse brings up in our conversation. 

Alec: [00:12:12] That's right. Over the past year, the firm has invested $10 billion into the metaverse they've staffed up. They plan to release new headsets, VR headsets in 2024. And they've even opened a physical store. 

Sascha: [00:12:24] Well, a physical store, as part of going into the metaverse. That seems like a step backward. Yeah.

Alec: [00:12:30] Yeah. Well, look, they've got to teach us how to use VR headsets and haptic gloves and whatever else there they're inventing somehow. So think of it like an Apple store, but for all the hardware that Matt is going to build. True. But we're talking about Sheryl Sandberg here. 

Audio clip: [00:12:46] Once the company changed its name and refocused on the metaverse, you could tell the clock was ticking. 

Alec: [00:12:50] The reports are that she was sidelined or perhaps not interested in the move to the metaverse. There were executive meetings that she wasn't involved in as perhaps the world's leading executive for digital ads businesses. After seven years at Google, 14 years at Facebook, this hard metaverse pivot and the new focus on, you know, VR headsets and other types of hardware may have left Sandberg feeling adrift. 

Sascha: [00:13:16] Adrift is still a strong word, though, because Metta made $120 billion in revenue last year. I'm going to go out on a limb and say I don't think a lot of that was coming from the metaverse. 

Alec: [00:13:27] Well, that is very strong and well-supported, supported limb that you're going out on, Sascha. Yeah, it's the digital ads business still, but I guess for the last decade, more than the last decade, Silicon Valley has had a really simple proposition. Give us your attention and your data and we'll give you free platforms. But that is changing. Elon Musk is buying Twitter and talking about different business models. Facebook is moving into metaverse hardware. Apple is cracking down with privacy changes. We may be seeing the end of the golden era of digital ads, or at least the amount of data they can suck up and then target us with digital.

Sascha: [00:14:03] Ads and the amount of money that they can earn from it as well.

Alec: [00:14:06] Yeah, yeah. Yes. So I think this is still the main part of their business and Sandberg is still incredibly important to that. But you know, perhaps the meta teams were the sexy part of the business and the digital ad teams were sort of seen as the old Facebook. 

Sascha: [00:14:22] So what I'm really hearing you say loud and clear is that matter is serious about the metaverse push. This isn't a flight of fancy. This is where they're going. Is there anything else that we can learn or we need to know about the future of metal? 

Alec: [00:14:35] So, look, this is unconfirmed as well, but recent reporting suggests Zuckerberg's management style has perhaps changed recently, and this resignation of Sandberg may confirm that. So to quote recent reporting from The Economist, reports were already swirling that his management style had become more iron fisted, taking big decisions with less counsel. Now, Zuckerberg's a bit of an outlier in the big tech industry. He's the only founder still calling the shots of any of the tech companies that crossed the trillion dollar. Mark Bezos left Amazon, Bill Gates left Microsoft. You know, Steve Jobs obviously died, but Tim Cook is in charge of Apple. So Zuckerberg remains an outlier. And his relationship with his sort of second in charge, his right hand had already been breaking down. And the reports were that his management had become you know, he'd become more solitary, I guess, in his decision making. And this may confirm.

Sascha: [00:15:31] That when she started, he was 23. The amount of development that you go through in the 14 years from 23 to 37. 

Alec: [00:15:39] He's 38. 

Sascha: [00:15:40] Now, 38. 

Alec: [00:15:41] Which is pretty crazy when you think about what he's done.

Audio clip: [00:15:43] When she joined the company, I was like a kid. She was actually as old as I am. 

Sascha: [00:15:47] Now, you know, you do a lot of maturing and they see as perhaps he feels more confident to make the decisions on. His own. So the second thing that we've learnt is that matter is now going to be a one man show. Can't wait to see what the metaverse is going to be like. I still can't really get my head around how I'm going to get involved, but let's put that aside. What's next for Sandberg? 

Alec: [00:16:05] Yeah, so it remains unclear at this point. She has said that she'll be focussed on philanthropy, but part of me doesn't expect that to last. It's very rare that these high flying, hard charging executives can go from 100 to 0 that quickly. And she's still quite young. She's 52. So, you know, she's still got big career ahead of her. She's been talked about as a future CEO before, so that wouldn't be a surprise. But she's also known to have political ambitions. 

Audio clip: [00:16:33] I learnt a long time ago never make any predictions about the future. 

Alec: [00:16:36] Sascha, I'm here for the Sheryl Sandberg, Mark Cuban 2024 presidential ticket. 

Sascha: [00:16:42] I'd be really interested to see where that would go.

Alec: [00:16:44] I have no idea about the politics of it all, but to billionaires it will be fun to watch. 

Sascha: [00:16:48] Oh well, let's wait and see. I guess we can hold out hope for the Sandberg Cuban ticket in 2024. Well, I like I think that brings us to the end of today's episode. Despite all of the recent controversy, I think we need to acknowledge what Sheryl Sandberg built and what she achieved at Facebook. Why don't you close out this episode for me with some of the numbers? 

Alec: [00:17:10] As I said at the start, Sascha Zuckerberg built a product. Sandberg built a business. I think that is Sandberg's lasting legacy. Last year, Alphabet, the owner of Google, was the only company that earned more from advertising than better. But here are some of the numbers. So in the year before Sandberg joined, Facebook had 500 employees. Today it has 77,000. In the year before, Sandberg joined, Facebook brought in 153 million in revenue. Today, it brings in 118 billion. And it's safe to say that outside Mark Zuckerberg, no one has done more to make those numbers happen. 

Sascha: [00:17:49] Those are staggering numbers and just a real testament to her success and I guess, talents as an executive. I agree with you. I'm curious to see where she's going to go next. Thanks so much for joining us for today's edition of The Dive. If there's a story you want us to talk about. Contact us at the dive at Equity Mates dot com or follow us on any of the social media channels. All those details, as per usual in the show notes below. Remember to write and review us and your favourite podcast app and subscribe so that every time a new episode drops. Mondays, Wednesdays and Fridays, it's going to be there right in your podcast player. You don't have to go searching for it. Thanks so much for joining me today, Alec. 

Alec: [00:18:26] Thanks, Sascha. Glad you're back. 

Sascha: [00:18:27] Until next time