Three Headwinds for Facebook's IPO

Harvard Business Review

I have used the social network for eight years and continue to be impressed with Mark Zuckerberg's focus on product and his vision for the internet. But equity investing and product use are very different things. And despite all of Facebook's user support, investors should be skeptical of the company's pricey IPO. Over the past couple of years, I've become close with a handful of web product managers. There is a lot of emotion behind the Facebook IPO.

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Geoffrey Moore: A third interview, by Bob Morris

First Friday Book Synopsis

Geoffrey Moore is Managing Director, Geoffrey Moore Consulting; a venture partner with Mohr Davidow Ventures, Chairman Emeritus, TCG Advisors, The Chasm Institute and The Chasm Group; and a member of the Board of Directors, Akamai Technologies and several pre-IPO Companies.

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Beyond Meat, and Facebook’s Pivot to Privacy

Harvard Business Review

Youngme, Felix, and Mihir talk about the Beyond Meat IPO and whether plant-based meat alternatives like Beyond Burger and Impossible Burger will become mass-market products. Growth strategy Social platforms Economics & Society IPO AudioThey then discuss Facebook’s announcement that it is pivoting to put greater emphasis on user privacy.

Yelp's IPO Will Test the Flaws in Its Business Model

Harvard Business Review

Yelp's IPO filing comes hot on the heels of successful IPOs and high valuations for Angie's List and Groupon. Yelp's timing reflects both a tech-friendly market and the company's current position as the dominant consumer-review web site. But new ways of searching for products may start to change this dynamic. Yelp has 22 million reviews, and the supposedly imminent onslaught of competing review sites has yet to materialize.

Why Investors Who Bought Groupon's IPO May Be Disappointed

Harvard Business Review

billion market valuation. As a price strategy consultant, it's common for managers and sales people to enthusiastically pitch me on a strategy of "let's get them in the door with a big discount, they'll love our product or service, and then return to pay full price." This is because drastic discounts devalue a product and are often viewed as acts of desperation. In addition, with little differentiation and a bevy of rivals, marketing costs are skyrocketing.

The Flawed Premise Behind the Candy Crush IPO

Harvard Business Review

As you may know, King Digital, the company behind the blockbuster game Candy Crush Saga , is about to IPO. Jim Surowiecki in the New Yorker and Felix Salmon at Reuters (and many, many others) have analyzed the IPO. Salmon thinks that the market is so frothy that companies have to have a credible plan to IPO just to seem viable as an acquisition. In his interview with HBR, Salganik explained that having a cultural product of good quality is not enough.

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Innovation Is as Much About Finding Partners as Building Products

Harvard Business Review

DNA genetic testing company 23andMe fell behind on its communications with the FDA, resulting in a temporary ban on marketing the company’s personal genetic screening services to the public. A123 Systems promised to be a clean tech success with a soaring IPO in 2009. Acquired out of bankruptcy by a Chinese company to focus on the burgeoning domestic market, A123 recently announced it will close its Michigan plant as it winds down production of lithium-ion batteries in the U.S.

Making the Turn: 10 Warning Signs You aren’t Shifting from Founder to Leader

N2Growth Blog

Maybe you’re prepping for the IPO. Missing the turn or making it too late can cause a company to stagnate or implode or can spell the death of the idea; or worse, the idea becomes someone else’s to bring to market without you. By Thomas Brattle Gannett and Dr. Greg Giuliano.

Why Good-Better-Best Prices Are So Effective

Harvard Business Review

operator of theme parks including SeaWorld and Busch Gardens, recently filed for an initial public offering (IPO). First, a key challenge is few of us have actually seen a demand curve for our product — let alone an asterisked price point. Marketing IPO

Hackers and Hummingbirds: Leadership Lessons from Facebook CEO Mark Zuckerberg

Terry Starbucker

In his IPO letter Mark Zuckerberg wrote: “I started off by writing the first version of Facebook myself because it was something I wanted to exist. You are recognized and respected based on your contributions to the improvement of the product; your résumé or your age doesn’t matter.

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What Venture Capital Can Learn from Emerging Markets

Harvard Business Review

Venture capitalists are increasingly interested in emerging markets, and in working with local funds based in those markets (despite the fact that reverse innovation in venture capital seems counterintuitive). The interesting part of this shift is that VCs are taking a more holistic or "systems" approach to investing than they typically do in developed markets. In contrast, emerging-market VCs such as Nadathur Holdings (established in 2000 by N.S.

When a Product Fails, Find a New Direction

Harvard Business Review

Your company has just developed an amazing new product. Having observed management teams for decades as a mutual fund and portfolio manager, I have watched numerous companies vanish after a disastrous launch of a product or service. Cephalon's IPO was in 1991, part of the second wave of biotechnology companies to sell shares to the public. Baldino moved aggressively to bring Provigil to market. Years of development, energy, and, of course, money have gone into it.

Should Everyone Be Allowed to Invest in Private Tech Companies?

Harvard Business Review

In addition, given their quest for organization leanness, digital startups seek investors who have the expertise to help outsource their noncore business functions, such as production, distribution, marketing, and payroll processing. Financial markets Policy Digital Article

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Why We Shouldn’t Worry About the Declining Number of Public Companies

Harvard Business Review

stock exchanges has declined by almost 50% from its peak in 1996, despite dramatic increase in aggregate market capitalization. Furthermore, as production shifts to Asia and more and more U.S. westend61/Getty Images.

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Why the Fail-Fast Approach Isn’t Right for Breakthrough Ventures

Harvard Business Review

You develop minimally viable products, keep testing different market and product hypotheses, and pivot based on the market feedback you get. You expect to fail repeatedly and hope to eventually get to a product-market fit. It enables the product to function.

Some of the Most Successful Platforms Are Ones You’ve Never Heard Of

Harvard Business Review

Then the banks decided to turn the associations into for-profit companies, IPO them, and cash out. MasterCard IPO’d in 2006, and Visa followed two years later. That standard may then become a platform for many firms that produce complementary products and their customers.

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What to Do When Your Boss Says No

Harvard Business Review

The company started as a single store, but about a decade later it was a national chain on the heels of filing an IPO. ” He told me he regularly said no — to more staff, to bigger marketing budgets, to additional equipment. Without a larger marketing budget, sales will drop. Ethan talked about all the times he’d been told no in his career: on plans to merchandise products, sophisticated inventory control systems, and basic training handbooks.

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NewTV Is the Antithesis of a Lean Startup. Can It Work?

Harvard Business Review

NewTV is the creation of Jeffrey Katzenberg, whose track record includes head of production at Paramount, chair of Walt Disney Studios, and cofounder of DreamWorks. Tech IPO prices and subsequent trading prices were disconnected from revenue and profits. IPOs dried up.

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A Recession Doesn’t Mean Your Startup Can’t Grow

Harvard Business Review

So far this year, the stock market has been anything but stable. I joined HubSpot, an inbound marketing software company, as the fourth employee and first salesperson in 2007. Within months of the market crash, layoffs at other companies yielded a sudden spike in available sales talent.

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Why Unicorns Are Struggling

Harvard Business Review

When financial services company Square priced its IPO at $9 a share last November, well under the $15+ price that private investors paid the year before, it was a cold shower of reality for the 6-year-old company.

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How Chinese Companies Can Develop Global Brands

Harvard Business Review

China leads all emerging markets with 89 companies on the latest Fortune Global 500 list of the world’s largest. To many skeptical consumers in developed markets, Brand China still means lower quality. Branding China Marketing

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What Wall Street Wants to See From Twitter’s Executives (and Why It’s Wrong)

Harvard Business Review

Between now and the IPO, every bit of information about the company’s finances and other metrics will be closely scrutinized. You can expect to see endless discussions in the press about revenue, valuation, user growth, and product. Research shows that firms’ management teams influence the success of their IPOs. One study found that “stock option compensation was positively related to IPO performance, as measured by investor valuations.”

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A Quiet Revolution in Clean-Energy Finance

Harvard Business Review

In the last year, however, early-stage investments in clean energy production technologies have fallen substantially (see the table at the end of this piece for more detail). A star example is Google, which raised a mere $40 million in private funding before its IPO at a $23 billion valuation. Despite these gloomy headlines, three developments in the sector give us hope that the revolution in clean energy production is far from dead: 1.

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Why Mega-Mergers Are Back in Vogue for Internet Companies

Harvard Business Review

For many consumer tech companies, this post-IPO pressure on financial returns is too high. However, many of them go public at a point when they only have one product, even if it’s still unrefined. Today, telco market leaders like Verizon and Sprint are in a similar position.

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Don’t Settle for Being an “-er Brand”

Harvard Business Review

Er brands rely on other products or brands to explain their own. It also puts your brand under constant pressure to introduce new products on Brand X’s time line, because now your brand value is tied to Brand X’s product. That sets the bar quite high, and I understand not every product can be truly new to the world. billion IPO valuation in 2013) can be attributed to its continued focus on that target. Branding Marketing Strategy

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The Two Traits Every Entrepreneur Needs

Harvard Business Review

At that point it had seven different products, and it was on the verge of going out of business. The first thing I did was figure out which of the seven products we could shut down, and why this made sense strategically. One of our products involved loan syndication.

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A simple cure for the Buzzword Bingo | Rajesh Setty

Rajesh Setty

We used agile method to build the product using the latest open source stack and some mashups with a few online services. The product was conceived in one of those Barcamps where we were discussing Blue Ocean Strategy and suddenly one of them suggested that with a little bit of knowledge arbitrage from the trucking industry, we could enable a product that will take advantage of the “ wisdom of the crowds &# and also capitalize on the “ long tail &# phenomenon.

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Why Financial Statements Don’t Work for Digital Companies

Harvard Business Review

On February 13, 2018, the New York Times reported that Uber is planning an IPO. Twitter reported a loss of $79 million before its IPO, yet it commanded a valuation of $24 billion on its IPO date in 2013. In the 2016 book The End of Accounting , NYU Stern Professor Baruch Lev claimed that over the last 100 years or so, financial reports have become less useful in capital market decisions. Many digital companies have no physical products and have no inventory to report.

Why Microsoft Is Willing to Pay So Much for GitHub

Harvard Business Review

Financial value is the stuff of business school and stock markets. Strategic value, on the other hand, has little to do with any of those things and almost everything to do with how a company’s product and/or market position help or hinder another company’s (usually a bigger one’s) ability to be successful. Drew Angerer/Getty Images. Microsoft’s $7.5

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The Facebook Investor You Never Want to Become

Harvard Business Review

A few weeks ago, I read an article in the Wall Street Journal about people who had opened up their very first investment accounts just to get in on the Facebook IPO. It also seems likely that he's kicking himself today, as the value of the stock has dropped almost 25% since its May 17 IPO.

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Three Things that Actually Motivate Employees

Harvard Business Review

The most motivated and productive people I’ve seen recently work in an older company on the American East Coast deploying innovative technology products to transform a traditional industry. To a person, they look astonished when I ask whether their dedication comes from anticipation of the money they could make in the event of an IPO. Their products are early stage, which means daily frustrations as they run through successive iterations.

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Can Impact Investing Avoid the Failures of Microfinance?

Harvard Business Review

Impact investors over the past decade largely focused on proving that impact investments could achieve a “market rate” or above return profile. Making something wildly profitable will of course attract the attention of financial markets, and thus increase the chances it will scale effectively. One school of thought held that, for microfinance to scale and attract and maintain commercial capital, it needed to show that it could achieve market rates of return.

Under Fire, Microfinance Faces Falling Out of Favor

Harvard Business Review

Microfinance has come under fire in the past 18 months, triggered in part by SKS Microfinance's IPO. The IPO, the new regulations, and a call for Dr. Yunus's retirement from Grameen Bank have led some to doubt the whole notion of microfinance. They're about market creation: When the poor earn more income, they consume more products.

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Twitter Isn’t Just Another Social Company

Harvard Business Review

Last week, Twitter’s management subtly let the world know of their upcoming IPO in 140 characters or less. And in almost all of these cases, Twitter is just being thrown into the role of the next social tech IPO. Instead of discussing Twitter as a business, and its strengths and weaknesses, most pundits are simply throwing Twitter into a broad tech category and speculating about IPO valuation. Conversely, for a competitor to enter Skype’s market and steal me away (i.e.,

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Subscription Businesses Are Booming. Here’s How to Value Them

Harvard Business Review

Previously dominated by the likes of newspapers, magazines, gyms, utilities, and telecommunications firms, more products and services are being offered to more people through subscriptions than ever before. went public in June, then saw its stock price fall 70%, making it the worst performing IPO of a major company so far in 2017. grocery market were almost $800 billion, only 1.2% Philippe Marion/Getty Images. The subscription business model is booming.

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The Most Innovative Companies Have Long-Term Leadership

Harvard Business Review

The M&A markets are frothy, corporations are investing in Silicon Valley labs, and even PhDs looking for jobs in business schools are finding it tough to find homes without “innovation” somewhere in their background. Call 2014 the year of innovation.

The Best Platforms Are More than Matchmakers

Harvard Business Review

True platform innovators aren’t just market matchmakers using data-driven algorithms to drive better buyer-seller matches; they invest in new value creation. In platform markets, cultivating user capability becomes as strategically important as reducing transaction costs.

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The Best Companies Invest Aggressively in These 3 Areas

Harvard Business Review

We were reminded of this a few years ago, when we studied a major European conglomerate with more than 50 distinct businesses spread across dozens of markets. The company’s success has made it one of the best-performing IPOs in Asia in the last decade.

Startups Can’t Revolve Around Their Founders If They Want to Succeed

Harvard Business Review

Even when startups have great products and customer interest, they struggle with long-term growth. Founders may lack the skills and interest to lead those activities effectively — what they typically love is dreaming up and building products.

Don’t Build Your Startup Outside of Silicon Valley

Harvard Business Review

There are three pieces of data that are particularly shocking to internet, software, and biotech entrepreneurs who are on the verge of committing their firms to starting firms in secondary startup markets (and, in particular, outside of the San Francisco Bay).

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Why Weight Watchers Can't Ignore the Call to Go "Free"

Harvard Business Review

"Free" product competition strikes again and the latest casualty is Weight Watchers, whose CEO recently left the company in the midst of the onslaught of free weight loss and fitness applications. They neutralized the threat and entered the market with "free" all in one move.

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Many CEOs Aren’t Breakthrough Innovators (and That’s OK)

Harvard Business Review

However, CEOs often don’t have the career background and education that would equip them to personally lead the process of new product development. This would mean, for example, working in R&D to lead pharma innovation, new product development for high tech, and product design or merchandising for fashion retail. And these often have to be significantly better than what’s on the market (in other words, breakthroughs) due to the high cost of R&D.

What Entrepreneurs Should Ask Themselves When an Economic Crisis Hits

Harvard Business Review

After the stock market’s rocky ride in recent months, some analysts are wondering whether a new economic crisis might be around the corner. For most investors, the options are straightforward: sell shares to limit financial losses, hold shares and hope everything will blow over, or buy shares if there’s a belief the market has bottomed out. He had quit college, and his only other work experience was junior marketer in an ad agency. Jonathan Knowles/Getty Images.

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