[LambdaComplex]

Based on multiple previous employers of mine, it seems like software companies start noticeably going downhill about 1.5 years after they go public. Let's check Wikipedia and see how I did:

> On 29 November 2021, HashiCorp set terms for its IPO

...I'm starting to think I'm onto something. (I do welcome anecdata that either helps or hurts my hypothesis)

[FridgeSeal]

> it seems like software companies start noticeably going downhill about 1.5 years after they go public.

I firmly believe this is a fact too.

One place I recently worked, I joined as it was going public and it went downhill quickly. The friends I’d made there talked about the fun perks, holidays and benefits the company was known for. Over the space of less than a year most of the culture atrophied, people left in droves and there were exactly zero holidays or perks given out.

[klardotsh]

I hate to say it but this feels inevitable. We've accepted that the requirement (legally!) of a public company is to deliver the maximum possible returns to investors, and as such, employees become a cost center to optimize away, and just generally, anything that negatively impacts the quarterly report must be eliminated, even if that thing is the only thing that will keep the next quarterly report in the black.

Quarterly scope for fiscal data is one of the most short-sighted decisions humans have ever done. Expecting quarterly up-and-to-the-right, where simple sustenance is not enough, but profit must grow quarterly, on a planet with finite resources in an economy with finite money, is a guaranteed, zero-exceptions, recipe for failure, by definition.

[scarby2]

Fiduciary responsibility isn't entirely about returns, it's about the best interests of the investors. And if you've invested in a company with a certain mission it would be said to be in your interests for that mission to continue.

If I were starting a business these days I'd be tempted to found it on the basis that 60% must be owned by employees of the company until the last living descendant of king Charles dies.

[p_l]

It's not a legal requirement. Fiduciary duty doesn't even mean you have to act in best interests of the investors, just that you're honest and not trying to swindle them.

Making it seem like it's a legal requirement however is a very good thing for all the corporate raiders out there.

[dudus]

1.5 years?

Their stock was down 60% only 3 short months after IPO.

I think this is just a struggle to turn what was once technical excellence into something that gives money. I haven't followed HashiCorp lately but was once a fan of some of their products. These days it seems things are slower over there. At least that's what it feels at a distance.

[wmf]

They IPOed at the peak of the ZIRP bubble. There's nowhere to go but down.

[scarface_74]

How many of those companies were profitable before going public?

[LambdaComplex]

Are you implying that it's impossible for a company to be both profitable and have a good internal culture?

That's a scary thought.

[scarface_74]

No I’m saying most tech companies went public without being profitable and that had more to do with the declining stock price.

[foobiekr]

It's not weird at all to go public before profitability, that was even the standard in tech for the longest time. The IPO was a _fundraising_ event, not a dump-the-company-on-the-public-and-move-on event.

[scarface_74]

All of the current BigTech companies except Amazon were profitable before going public - Apple, Microsoft, Google, Facebook.

The vast majority of tech companies that IPOd since Facebook have been a disaster of an investment.

[foobiekr]

Time didn't start in 2004.