Social gaming company Zynga has seen turbulence since it went public. The following chart from YCharts sums it up:
Revenue has taken a dip from its high in mid-2012. Since the beginning of that year, the company has lost significant money most quarters. And the stock price, currently hovering around $2.50, is far off its high of close to $15. In fact, as of Thursday morning it was down nearly 12 percent from Wednesday.
According to Sterne, Agee & Leach analyst Arvind Bhatia, as quoted by Reuters, this was the wrong move. Things were finally moving in the right direction under Mattrick. But Pincus was chief product officer until he resigned last year, and the big problem for Zynga has been its inability to create new hit games. So, the guy who originally had to leave as CEO and who didn't deliver on product strategy is now back in charge of the whole company.
Bringing in a founding entrepreneur as CEO after a bad spell can sometimes work. Apple famously thrived after the return of Steve Jobs, who had learned some practical lessons about how to run a company. Howard Schultz led a turnaround of Starbucks. As part of it he asked employees how things were going in the stores, brought in outside consultants, and generally took some smart advice.
Bringing entrepreneurs back to run the companies they founded can sometimes work. These are the people with the most direct connection to the roots of the business and an understanding of the fundamental culture.
But walking in from the past isn't enough. If the old ways of working had been sufficient, there would have been no need to replace the entrepreneur in the first case. What the company in trouble needs from a founder is a touchstone who is also capable of learning necessary lessons so the business can move forward.
The question about Pincus is whether he's experienced enough distance from Zynga to learn whatever he needed to move beyond his original faults as a leader. But he only left an operational position at the company about a year ago. Furthermore, the company's stock structure ensured that Pincus has maintained a strong majority of all voting stock, meaning that no one has been able to seriously challenge him on strategy. It seems unlikely that he's had time and circumstances for the humbling experiences that can lead to the learning, improvement, and management tools necessary to put a company on the right course, particularly as, since going public, it was never on the path for an extended period of time.