What a Facebook IPO means for Silicon ValleyPosted by admin on February 01, 2012
GigaOm, February 1, 2012 —
Brad Silverberg shares his perspective on how Facebook’s IPO could impact company culture…
Get ready for a blockbuster — and almost nuts — technology 2012. Why? Because Facebook is doing the mother of all initial public offerings.
And much like Netscape and Google before it, the $5 billion offering is being viewed as the much-awaited catalyst for the technology industry and is expected to set off a flurry of activity. I have been here long enough to cover the IPOs of both Netscape and Google, and on both occasions, the tailgate effect was enough to pull even the clunkers (read: marginal startups) to the proverbial finish line.
We are already seeing four recently public companies — Pandora, LinkedIn, Zynga andGroupon — ramping up their efforts to buy little startups. Google is competing for talent and so are other Internet giants. And now Facebook!
I have been wondering whether we would see a slow exodus of Facebook employees, which in turn would force the social networking giant to go out and start acq-hiring people by buying a lot of tiny startups. And if more of these little companies get acquired, the more dollars would rush into the startups and thus creating a fly-wheel effect. The presence of Facebook millionaires is only going to accelerate angel investment activity….
Brad Silverberg, a veteran of Microsoft and other tech companies and general partner at Ignition Partners, a Seattle-based venture fund, thinks that the IPO could have a corroding influence on the company culture.
One of the biggest challenges Facebook will face is the gulf between the have’s and have-not’s within Facebook. It can create tremendous internal stress and can result in people leaving to follow their own entrepreneurial dreams. This can be both for early people who made it and love the thrill of the startup, and for later people who are contributing, gain confidence, and now want to go off and make their own fortunes.
I think Brad’s point is pretty spot-on. I have seen this haves-versus-havenots dynamic create havoc at many companies before. I have spoken to multiple people and there is a general sense in the Valley that there is a large contingent of Facebook-ers who are ready to bolt. Google in comparison didn’t see an exodus of employees till recently, mostly because of its deep engineering-centric culture. Google, before it was grafted with the Microsoft genes, was a company where the smartest people went to be with the smartest people. It wasn’t till 2007 that the company started to lose its top-rated talent…
Read the full article on GigaOm.