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this post was submitted on 30 Jan 2024
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Those are the best two examples that come to my mind. Both were great until they IPO’d.
The problem, as I see it, with IPO’s is that the company becomes beholden to shareholders who care nothing for the product, and only for the profit. Quality and profit are fairly mutually exclusive these days.
Reddit hasn’t gone public just yet
Sometimes you have to pre-suck to show investors you are serious about dismantling your company so they can feed on the corpse.
build something, IPO and cash out, then wall st. vultures suck all the value out of it
Google IPO'd back in 2004. Do you really consider that to be the pivotal point in Google's history?
Reddit hasn't even IPO'd yet.
Going IPO does not immediately turn a company evil. That’s something that happens over time, because of being beholden to so many shareholders who only care about profit.
Reddit has been making many user-detrimental changes in preparation for their IPO.
It's not that quality and profit are mutually exclusive - look at valve, Wegmans... Fuck the list of well known companies I can think of off the top of my head is pretty short.
But you can be plenty profitable and produce quality products, with ethical business practices no less.
Exponential growth is what's incompatible with quality. And taking the money is what sets you on the path - when you take investments, you're trapped. Eventually, you're going to have to IPO, and every step of the way they'll be pushing you to take more investments, more loans, reinvest it in growth... Because if you explode overnight they'll make 100 or 1000x their investment, and if not you can sell off your future to look good for your IPO, and they'll still make a ton of money.
And if you fail? Well, venture capitalism is the scratch off of investments... It's high risk high reward, one big winner makes up for all the losers - a modest win barely competes with far safer investments