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The Maturation of the Billionaire Boy-Man

“The criticism [of CEOs like Zuckerberg] is that they’re overly Machiavellian and don’t care about people,” says a former Facebook executive fired by Zuckerberg. “But this is really what is required to build a long-term sustainable business.” The executive added that while many people canned by Zuckerberg over the years feel screwed over, he couldn’t think of any instance in which Zuckerberg was actually unfair. “He is not a bad guy,” the executive says. “Maybe he’s not a good guy, but he’s not a bad guy.”

Removing Van Natta made it possible for Zuckerberg to hire Sheryl Sandberg, one of the most important moves he has ever made. (A longtime Facebook exec calls the subsequent partnership between Zuckerberg and Sandberg “a blessing from the gods.”) Zuckerberg spent more than 50 hours wooing her away from Google, where she had built and run the online-sales organization. According to a New Yorker article by Ken Auletta, after meeting at a Christmas party in 2007, they had several sit-downs over the next couple of months—first at a café in Atherton, near Sandberg’s house; then, because that was too public, in Sandberg’s kitchen (at the time Zuckerberg was living in a tiny apartment with barely any furniture). When the tech elite flew to Davos for the World Economic Forum that January, Zuckerberg rode with Sandberg and the gang on Google One—the 767 owned by Google founders Larry Page and Sergey Brin. The two spent the flight huddled conspiratorially—a fact that did not go unnoticed within Google. In addition to her being phenomenally good at the job Facebook needed doing—building and managing a global corporation—Zuckerberg found another attribute appealing: She was okay being No. 2. Most of the executives Facebook considered for the COO slot admitted that they would eventually like to be in charge. Facebook already had its CEO, so this was a nonstarter.

For some Zuckerberg skeptics, it’s the quality and stability of the management team he has built that’s made them believers. To attract and retain people like Sandberg, who don’t need to work and can work anywhere, he has had to first be a good boss—talented people don’t like working for assholes—and, second, to let go of aspects of his company that another founder might have clung to. One former Facebook executive believes that the management blunders Zuckerberg made in Facebook’s early years are part of what has made his partnership with Sandberg work so well. The former exec likens this experience to the mistakes he made in relationships before he got married: “All that learning and fucking up in the past is what makes me a great husband.”

The Zuckerberg-Sandberg duo has been so successful—annual revenues have increased from $150 million to nearly $4 billion since she came aboard—that it has now become a new model for tech company-building. Instead of replacing the quirky founder with a professional CEO, companies now try to “go get a Sheryl.”

When talking about Zuckerberg’s most valuable personality trait, a colleague jokingly invokes the famous Stanford marshmallow tests, in which researchers found a correlation between a young child’s ability to delay gratification—devour one treat right away, or wait and be rewarded with two—with high achievement later in life. If Zuckerberg had been one of the Stanford scientists’ subjects, the colleague jokes, Facebook would never have been created: He’d still be sitting in a room somewhere, not eating marshmallows.

Most Wall Street investors would perform miserably on the marshmallow test. Over the past couple of decades, as the money-management business has gotten ever more competitive, they have elevated the narrowly defined concept called “shareholder value” to an absurdly exalted status. Shareholder value, in the minds of most investors, is synonymous with “today’s stock price.” If today’s stock price is higher than yesterday’s stock price, a company’s management is said to have “created” share­holder value. If today’s stock price is lower, management “destroyed” it. It doesn’t matter that the decisions and priorities that boost stocks in the short term—such as inflating this year’s earnings by firing people or cutting product-development spending—are often at odds with decisions and priorities that create greater value over the long haul.

Nor does this obsessive focus on stock prices recognize that companies are a lot more than ticker symbols. They create jobs that employ people. They create products that help people. They devote resources to ensure that they’ll keep creating this value for decades, despite the fact that these investments reduce their near-term profits. In other words, these companies create societal value. As Warren Buffett and a handful of other investors have often observed, this balanced approach allows such companies to create huge value for some shareholders: the ones who stay put for the long term.