[user3939382]

The problem with going public is that performance is now measured quarterly. This incentivizes mortgaging the long-term health of the company for short-term gains. Brand loyalty and trust become assets that can be profitably liquidated by diluting the quality of products and services.

By the time customers catch on and the company falters, the investors/owners that profited financially, and managers that profited on their resumes, from the short-term gains may have moved on. The party that's really hurt is the customer base.

I've seen this play out again and again.

[wnevets]

I've been following Yubico since almost its inception so I'm happy for Stina and her team. However I agree that this will probably end up being bad for customers in the coming years. I hope I am wrong.

[iudqnolq]

It's interesting she's now the "Co-Founder and Chief Evangelist"

[JumpCrisscross]

> incentivizes mortgaging the long-term health of the company for short-term gains

Private company Boards can be more ruthless than public companies’. (Historically, this was the norm.) Much of tech’s myth of quarterly metrics and short-term planning in public companies comes from unfamiliarity, not fact.

The last years of public tech companies had zero discipline. Everything was long term. Right now, Apple’s investors are fine with decades-long secret plays while oil and gas companies have short-term investors. Managing your shareholder base is part of managing a large company, public or private, and as with so many thing comes down to the people involved more than any heuristic.

[Scoundreller]

> The problem with going public is that performance is now measured quarterly.

Depends on ownership. When the insiders still own 80% (or control that much through super-voting shares), the minority shareholders’ interests (often but not always short-term) may still be ignored.

[wintogreen74]

The market now measures performance regardless of ownership. Just because they retain a huge percentage of shares, or controlling interest, doesn't mean they'll accept massive declines in market value.

[mattmaroon]

It means they can though. The tech world is full of examples of companies keeping their focus long-term due to dual class structure and/or founders retaining large stakes despite the vagaries of the market.

But, nothing lasts forever. Eventually the founders sell, the shares get converted to common, etc.

[selectodude]

Facebook is, even now, entirely beholden to Mark Zuckerberg's willingness to accept falls in share price. He cannot be removed.

[halJordan]

This is the zeitgeist, i get it- corpos bad. But it is such a simplified cliché to buy into so wholly. Public companies are capable of long term planning. Quarterly reviews do enforce efficiency. What you've seen play out again and again is good corporate governance from public companies, you just don't notice it and more's the pity.

[user3939382]

You put words in my mouth (corpos bad) and then said it’s oversimplified. It is over simplified, but you over simplified it, not me.

[halJordan]

I didn't put any words in anyone's mouth. I said you were manifesting a zeitgeist. But honestly you're manifesting another intellectually dominant school of thought. Whereby if anyone does anything less than word for word block quote it's: "i didnt say that. You're wrong." I can absolutely characterize your speech and identify it's meaning and regurgitate it all without resorting to quotes. In fact quotes are a pretty weak form of displaying understanding.

[darkwater]

When you start a comment with "the problem is" and then also add "customers are hurt", well, I would say it's not unreasonable to infer you are expressing a negative opinion on public traded companies.

[JohnFen]

What I've seen play out time and time again is that a company with a good product goes public or gets purchased, and then their good product gets worse. Often much, much worse.

As a customer, I don't care why this is, but it is. That's why this is bad news every time it happens -- it's not that corporations are bad, it's that the products very often (but certainly not always) become undesirable.

[ninkendo]

To be fair, I think a lot of the time a company's initial product is developed/sold in a way that is unsustainable for profitability, in order to attract users/customers/etc. Think "growth hacking", etc. By the time such a company is bought, it's already at the point where they need to start focusing on long-term profitability anyway, which means cutting costs and actually finding a plan to make money. This always needs to happen eventually, and typically being bought (or IPO'ing, etc) is an impetus for this change.

[JohnFen]

I'm sure that's the case a lot of the time. But, as I said, as a customer I don't care why this effect happens. Regardless of the reason, events such as going public, etc., still mark an inflection point where the odds are decent that the product will become much less desirable.

But, as long as we're talking about possible causes, that startups do this sort of thing (catchy name like "growth hacking" or not) is a kind of deception that I object to anyway.

Releasing a product is a kind of promise, in a way. If a product is being released in an unsustainable way (growth hacking), the company should be calling that out from day 1.

[codetrotter]

> The problem with going public is that performance is now measured quarterly.

The company I work for did not IPO yet either, and we still do performance reviews every quarter. So idk if going public matters much in that regard.

[pinewurst]

There’s a difference though between you doing internal quarterly reviews and being held to account by Wall Street analysts and hedge funds looking for perceived weakness.

[widowlark]

who defines your quarterly goals as a private company?

[wintogreen74]

Or more importantly, how are you goals measured after the quarter? Public markets don't take and mitigating factors into consideration when your financials tank the way a private company does.

[insanitybit]

Your investors (and potential investors) have a take, certainly.

[codetrotter]

My bosses and their bosses and their bosses and so on. Probably the board as well, in the end.

I’m a simple Software Engineer, so I don’t really have much insights into that whole side of things.

[widowlark]

but thats my point - its a much smaller group of usually highly invested people if your company is private (even with the quarterly reviews) - with a public company, there are a lot more investors with a lot lower stakes, which manipulates the goals and intentions of the company significantly.

[1letterunixname]

Yep. Expect features to roll out nonstop but quality to drop and things to break.