

Going Public Means Never Admitting You’re Wrong - jordaninternets
http://jordanstaniscia.com/2012/05/going-public-means-never-admitting-wrong/

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jbigelow76
The author makes the point that companies don't admit mistakes because they
fear the stock would plummet. I don't think that is entirely accurate, or if
it is, the stock plummet is incidental to the actual risk that comes from
admitting mistakes: investor lawsuits.

And regarding start-ups and their propensity for owning up and apologizing,
I've never really seen much in the way of sincerity from the likes of Path or
those in similar flare ups. It's just that an apology is the quickest and
cheapest form of damage control when the fickle masses and page view hungry
tech bloggers are crucifying you on twitter.

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tmsh
Usually I dismiss posts like this. And I have to admit -- I browsed the
frontpage several times without clicking on it.

But I think this is very cogent, and one I had totally forgotten about in the
whole FB media circus. But this is a rare opportunity for FB to reject
precisely the parts of public company SOP that doom them to lack of
understanding with their customers, etc.

FB has a hacker / break things culture. Public companies can't admit these
things to the public.

Public companies often stagnate by not being able to relate to customers via
the full feedback loop that admitting mistakes includes. Some companies get
lucky because they insist on getting in touch with what the customer wants in
other ways (e.g., through data at Google or through Lean Startup and two-
pizza-size teams at other companies, etc.)

But it is an opportunity for FB to buck the norm and continue to take _open_
risks and admit when they make mistakes. It is an opportunity to transform the
culture of public companies.

~~~
tatsuke95
> _"Public companies can't admit these things to the public."_

The OP's article is based off of a faulty premise, disproven with a simple
Google search. Yes. They can and do admit they were wrong, and apologize
publicly. It's ridiculous to suggest otherwise:

[http://www.telegraph.co.uk/news/worldnews/northamerica/usa/8...](http://www.telegraph.co.uk/news/worldnews/northamerica/usa/8972788/FedEx-
issue-online-apology-after-video-of-courier-throwing-package-over-fence-goes-
viral.html)

[http://www.washingtonpost.com/wp-
dyn/content/article/2010/02...](http://www.washingtonpost.com/wp-
dyn/content/article/2010/02/01/AR2010020100275.html)

[http://news.xinhuanet.com/english/china/2012-05/05/c_1315692...](http://news.xinhuanet.com/english/china/2012-05/05/c_131569282.htm)

<http://blog.netflix.com/2010/09/apologies.html>

[http://blog.games.com/2011/08/03/nintendo-president-
apology-...](http://blog.games.com/2011/08/03/nintendo-president-apology-3ds-
price-drop/)

<http://www.cellular-news.com/story/51329.php>

etc, etc...

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gdubs
Isn't this conflating Morgan Stanley (and Nasdaq) with Facebook? One could
also blame the media for generating an inordinate amount of hype, and then
turning around in a day to call the IPO a failure. But, a failure to whom?
Most of what I've read here recently suggests that a successful IPO for a
company means leaving as little money on the table as possible, which means a
stock price that stays relatively flat (or even goes down a tiny bit). Because
everyone expected a pop, the IPO is considered a flop. One could look at the
situation from another angle and say that Facebook did what was best for
themselves, not the share price – which could be seen as a positive signal for
people who don't think that companies should be ruled by the short-term ups
and downs of the market. I mean, when the valuation of a company is based on
an extremely long outlook and yet-to-be-determined strategies and pivots, what
do people expect?

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mekarpeles
In general, I tend to think of startups as children, in or around their
creative prime. They are still leaning, often naïve, and are expected to make
a lot of mistakes (and also expected to handle them well). It seems reasonable
to apologize often to potential customers because they are taking a risk and
experimenting with you and your service/product. You're not so much
apologizing as you are thanking them for helping you determine your target
customer and their needs.

There are a lot of reasons why mistakes happen, but for many reasons the
startup stage is a good time to make mistakes.Especially before reaching
critical mass, at least from a business perspective, I believe it's easier to
justify upsetting a few thousand people if it means obtaining learnings which
can impact tens or hundreds of thousands of the _right_ customers (and help
you serve them better) down the road. I think the smartest startups are able
to minimize their mistakes by practicing due dilligence and learning from
others who have made similar mistakes.

Large, public corporations, in many ways, face a different set of
challenges.They are expected to understand their target customer, deliver
product(s), maintain revenue growth, all in the face of one other interesting
challenge. When you take your company public, a core group of your customers
changes roles from consumer to investor. Different customers have different
needs and expect different things. Some need fault tolerance, some crave
features, some need speed. Because you don't necessarily choose your
'investors' at this stage, there's no saying your expectations will be
aligned.

One challenge of running a company is, not all 'ethical' strategies (such as
apologizing, if it can be considered as such) result in either maximizing
revenue or maximizing customer happiness. When you have millions of customers,
I imagine every important decision can be construed as a mistake by some
subset of customers.

We live in a Peter Pan world where many startups wants to stay young forever
and never sacrifice their ideals. The truth is, a company is about serving
customers well, making a promise, and delivering on it. In order to do that,
you need to grow with your customer base and respond to the challenges this
entails.

Special thanks to zephyrp for editing.

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jscipione
As a counter example to the point made in this article, coming from none other
than Microsoft, is the following blog post detailing a leap year bug in
Windows Azure that caused downtime recently:

[http://blogs.msdn.com/b/windowsazure/archive/2012/03/09/summ...](http://blogs.msdn.com/b/windowsazure/archive/2012/03/09/summary-
of-windows-azure-service-disruption-on-feb-29th-2012.aspx)

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yuhong
I still remember this: <http://news.ycombinator.com/item?id=2545823>

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mjcohenw
The FB IPO was not a mistake for FB - all the money went to the company
instead of the insiders. The idea that the stock for an IPO has to soar on
opening day is flawed - if this happens, the company should have charged more.

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rmATinnovafy
When many own one, no one is to blame.

~~~
mekarpeles
I appreciate and respect what your comment is trying to accomplish, in terms
of associating ownership with the sum of its parts. I think this can also lead
to an 'escapist' mentality though, where no one takes ownership for mistakes.
Perhaps when many own one, many are to blame, instead of the one?

