Via Dan Gillmor and Jeff Nolan heard the Google IPO is official.
I'll be watching this one closely.
Having worked at large public companies (at the time I worked for GE it was Fortune #1), joined a start-up the same month they went public and later a venture-backed start-up that aimed to go public, I have pretty mixed feelings about ever wanting to work as an employee at a public company again.
It's obvious from reading about the impending IPO that Google has mixed feelings as well.
For instance, Gillmor highlights that they will "have an ownership structure that lets the founders manage for the long term, not Wall Street's quarterly attention span." Well, that's one good reason that I nixed the idea of going public for the company that's formulating in my mind.
The Business Week article this week on Google (agree with John Battelle it's not worth reading) mentioned an investor that couldn't wait to sell his shares. It was quite obvious he was uncomfortable with Google's "controlled chaos" business environment. Innovation really is basically controlled chaos. A higher level of coherence arises out of the edge of chaos. Not that unusual as start-ups go to witness creative chaos. Some go a little overboard and it's just chaos, period.
But have you ever watched a start-up make that corporate transition from the inside? It's not just that the dogs and beer bashes go, but something subtle, intangible seems to shift. The palpable energy evaporates. It's not the transparency that's at issue. Maybe not even the quarterly view of the world (most start-ups have to watch their cash closely anyway and thus balance the short-term and long-term).
It's more the unspoken effect and influence of "best practices" and the pressure to conform to a more respectable and familiar culture that are the hallmark of measurable metrics of Wall Street. Who knows what SAS's life-friendly practices are worth? Just looks like a cost to me on a balance sheet. Giving Googlers 20% of time to goof off on pet projects? That's productive time being wasted!
The re:invention blog recently was musing about the lack of women entrepreneurs receiving venture capital. When you sign up with venture capital financing (which only applies to a specific class of business ventures) you are committing to a future where you company concept will eventually be owned by a public company -- via IPO or M&A. Women know this.
I feel alot of women are purposely avoiding the IPO route. Why? I can't speak for 50% of the population, but for me:
- I'm in for the long term. And I want to work somewhere that doesn't remotely resemble the Fortune 20 today. I'm not a starry-eyed idealist, but I've seen what the focus on the quarter can do to a company and its original mission. Why am I going to work this hard to end up looping right back into Corporate America view of the world?
- I have some pretty audicious ideas, just like Brin and Page have their own ideas, about company culture and innovation that probably don't fit into preconcieved notions of how a company "should" innovate, market or operate. Sure, for the repeatable processes we can use the tried-and-true, but why label experimentation as being unproductive?
- Results matter, period. Why judge how we get there? But in a public company, you often will be. Your results could have been better without that "waste" or this "waste". Neglecting that "waste" was the path to results.
- I value the intangibles too. Human and social capital, creativity, productivity, vision, leadership, brand, goodwill, employee morale, customer satisfaction, and social responsiblity are pretty intangible and nearly immeasurable. I don't want to be at a company that believes that only what's on the books is the only thing that matters.
- My company doesn't need to make billions. Or have 100,000 people employed. I am more interested in maximizing and optimizing revenue per team member. That may potentially mean an organization that scales organically (networked models can scale quickly) versus forced growth. I don't believe that bigger is only path to better. Only impact matters to me.
- I don't think work-life balance is an either-or proposition. Creativity isn't a switch one turns on and off. In a company where innovation is key, I know that minds are on 24/7 and counter to the 9-to-5 structure of most companies, a seven-day weekend can maximize productivity and overall results. More 'face time', stress, anxiety, and burnout is not the formula for breakthrough ideas.
- I'd like my company to not only make money for the stakeholders (and public corporations must maximize investor return as their sole mission) but leave the world a better place. While some are lamenting the lack of women entrepreneurs in the private sector, it's gone unnoticed that there is a resurgence of women becoming social entrepreneurs and exploring hybrid models, that fuse social capital and financial capital gains.
I sincerely hope that Google breaks new ground in innovating what it means to be a public company. I'll be watching and maybe changing my mind.
Rock solid post, Evelyn. And great insight. Many women-led firms, particularly those with lower burn rates and operational costs, don't need VC backing. And often times loans can be aa better choice based on your business model. Wishing you all the best wit your goal to maximize and optimize revenue per team member. Let re:invention know how we can help you with your efforts!
Posted by: kirsten | Apr 29, 2004 at 08:51 PM
Evelyn:
I like the idea of making an impact which matters . This for me is also the most important thing.
Suhit
Posted by: Suhit Anantula | Apr 30, 2004 at 02:18 AM
As a whole, I think women are supportive of each other, and I think we deserve funding from banks or VCs if we have our business plan in order and we can show not only dedication, but creativity and innovation. I found a useful place online to explore funding opportunities which I am going to check out: http://www.womanowned.com/growth/funding/opportunities.htm
Posted by: Yvonne DiVita | May 01, 2004 at 07:22 AM
Hello, Evelyn. I came over here after your comment on Mitch Kapor's blog.
I think the big conflict of ideas here is one that Joel Spolsky once did a great article about: Do you want to become Ben and Jerry's, or do you want to become Amazon?
He uses Ben and Jerry's as an example of a company that took 20 years to build up, organically, over time. Amazon is his example of a company that tried to do a big "land grab", dominate a field before other folks even quite realize the field exists.
But to me, there's a flip side:
Are you (by "you" I mean the entrepreneur or investor) in business to Make Money Fast!, or to build an institution over time?
To me, the tech sector has historically seen companies go public mostly to Make Money Fast!, not because there was any true need for the company to do so. People have tended to have their "retirement number", or whatever... The amount of money where they would quit being in the workplace altogether.
One of the reasons I think Microsoft generates so much ill feeling toward it is that in an industry where everyone is trying to hit their "retirement number" and cash out, MSFT has always taken the long-term, we're-here-as-an-institution worldview.
This post is feeling very rambly to me as I write it. I hope it made some sense.
Since you appear to have disabled HTML, here's the link to Joel's post:
http://www.joelonsoftware.com/articles/fog0000000056.html
Posted by: Hal O'Brien | May 04, 2004 at 01:36 AM
Hal,
Thanks for that great link. That is a well-done article on Joel's site. I do think more many women opt for the Ben & Jerry's organic approach. I don't want to say much about my own business idea - but it doesn't fall neatly into either category. It has qualities of Amazon and qualities of Ben & Jerry's. For instance, it doesn't require loads of capital to start off in the first phase. However, I hinted that network effects would come into play (in a later phase). Organic growth could be somewhere in between Ben and Jerry's and Amazon (for instance, follows a Fibonacci sequence). I think there are a few business models that don't fall in either camp.
I'm all for growth, but I'm just not fond of the institutionalized ingrained thinking that is prevalent in public companies.
Part of the reason I was so down on public companies is that if you are doing anything that doesn't fit a "mold" then it is just not understood or appreciated by Wall Street. I'm not in the mood to fight an uphill battle in addition to running a company.
However, I think Google is showing that even that "mold" can be flexed and morphed quite a bit more than I imagined. I was the one that was rigid in my thinking until they pushed the limits in their SEC filing. I think we'll see more people pushing the limits and edges in various directions is what I was implying in Mitch Kapor's blog.
Posted by: Evelyn Rodriguez | May 04, 2004 at 11:21 AM