When Google went public in 2004, the company had a simple message for employees: Keep the sports cars at home.
Google's IPO created plenty of millionaires and even some billionaires, but founders Larry Page and Sergey Brin worried that it might also create a visible wealth disparity and shift employees' focus away from their work. "They were very clear they didn't want to see the fancy cars in the company parking lot," Lise Buyer, an analyst with Class V Group , who helped plan Google's IPO, told Mashable. "We were very worried about that at Google ahead of time. You need the organization to keep functioning."
Page and Brin "showed up to work in t-shirts the day before the IPO and t-shirts the day after," Buyer says, and they emphasized that employees shouldn't be caught fixating on Google stock. "It was really well done," she says, describing the Google founders' message to employees. "'Congratulations we are going public, now everyone go back to work. We're not going to be talking about the IPO from now on.'"
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Buyer has helped steer several tech IPOs over the years including those of Google and Trulia, and she has found that the most successful tend to follow this approach of making sure the IPO is "not the center of conversation" at the company. "Keep it in context," she says. "It is a nice financing event and a nice reason to pat yourself on the back, but it is not the big brass ring event."
Some execs have been more successful at keeping their employees grounded throughout the IPO process than others. Mark Zuckerberg was famously apprehensive about taking Facebook public and recently admitted he was "too afraid" of the idea. Multiple industry watchers told us some of Facebook's IPO troubles likely stemmed from the fact that Facebook's leadership felt forced into going public before they were ready and didn't adequately prepare for it.
Jack Dorsey, on the other hand, has repeatedly described the possibility of a Twitter IPO as little more than a "fundraising event," and promised that Twitter's leadership team wouldn't allow it to distract employees from doing their work. Sure enough, Twitter immediately followed up its tweet announcing that it had filed to go public with another tweet telling employees to get "back to work," suggesting more of a Google approach.
Now, back to work. pic.twitter.com/e4lK8e7pY9
— Twitter (@twitter) September 12, 2013
Twitter is currently in a quiet period prior to its IPO and declined to comment on this story, but interviews with other public and soon-to-be public tech companies offer a glimpse at how top execs try to prepare themselves and their employees for life after the IPO.
"Mostly, we wanted to make sure employees understood that an IPO isn't a finish line. In many ways, it's a new starting line," Jeremy Stoppelman, co-founder and CEO of Yelp, told Mashable. For Yelp and Stoppelman, that wasn't just a nice line: the company's leadership actually researched what other prominent businesses had accomplished in their first seven years — Yelp's age when it went public in 2012 — and what they accomplished after.
"For instance, I believe the Walt Disney Company had only recently created Mickey Mouse at that point in their history. It wasn't until about the 14 year mark that they released Snow White, and Disneyland didn't open until their 30-plus year mark," said Geoff Donaker, Yelp's COO. "So of course for Yelp, the message was: 'When we aspire to greatness, seven years and an IPO are just the beginning of what's possible.'"
Yelp, like most companies we spoke with, tried to limit the impact of the IPO on its employees' day-to-day work, other than to update employees on the process every two to three weeks as part of broader company wide meetings. "Unless you worked in accounting/finance or legal, your work was unaffected," Stoppelman said. Still, certain basic hiring and management changes are likely to be made.
Rich Riley, CEO of Shazam, told Mashable that the company scrutinizes new hires even more to make sure they are the type of person who can take on "10-times that level of responsibility" when the company is public. Even though Shazam's IPO is "at least" a year away, Riley says he has also pushed himself and the company to get better at setting quarterly goals. "Like it or not, public companies get measured in quarterly increments," he says. "As you train yourself to be ready for the scrutiny of the public markets and public investors, you have to get good at setting quarterly objectives."
Box, which expects to go public sometime next year, has gone a step further and actually holds mock quarterly earnings calls, during which employees ask questions suggested by analysts. The goal, according to Box CFO and co-founder Dylan Smith, is to "demystify" the post-IPO experience for employees.
"We have a very transparent company and don't want people to be shocked about what those calls are going to look like when we are a public company," Smith told Mashable in an earlier interview. The move also helps Smith and his co-founder Aaron Levie prepare themselves for the experience of running a public company.
The prospect of taking your company public can lead to a fair amount of anxiety, as Zuckerberg admitted. Most of the founders we spoke with attempted to mentally prepare for the change by consulting with other founders and CEO who had gone through the process.
"I met with several public company CEOs to learn about their experiences of going public, and listened to as many earnings calls as I possibly could," Jon Oringer, Shutterstock's founder and CEO, told Mashable. Shutterstock shares have more than quadrupled from their IPO price in October and Oringer became the first billionaire from New York's tech scene.
Stoppelman, from Yelp, says he personally sought out advice from the CEO of OpenTable, a competitor, as well as the CEOs of Salesforce and Zillow. It was Zillow's CEO Spencer Rascoff who gave Stoppelman what may be the most memorable piece of advice: don't forget to "take lots of pictures throughout the whole process."
"The IPO day is truly special, one that you'll as a career highlight for the rest of your life. Try to briefly smell the roses," Stoppelman says. "If all goes well, you won't need to IPO again."
Image: Emmanuel Dunand/AFP/Getty