Dan Primack has a gorgeous rant on his newsletter today about Twitter’s IPO. The New York Post reports that Twitter CEO Dick Costolo is talking to bankers and expressed a desire that the IPO be “low profile.”
Primack explains beautifully why that’s not going to happen no matter what Twitter, Costolo, the Nasdaq, the NYSE, bankers, mother nature, or God Almighty do. Twitter is a major company. It’s one of the most important Valley companies created in the last decade, and it’s revolutionized how media works. Of course the media will go full-on ape-shit.
That said, there are a few reasons this circus won’t be the same as the one around Facebook’s IPO.
1. Facebook’s IPO has already happened. You can’t over-emphasize how much pent-up excitement there was about Facebook’s IPO. Speculation has run rampant ever since Microsoft’s 2007 investment that valued the company at a then shocking $15 billion, a symbol of an imaginary dot com bubble the press kept citing. It was supposed to do so well it would usher in a wave of Valley IPOs and be the second coming of Netscape and Google all rolled into one. Frank Quattrone even referred to it as the “Jesus” of IPOs with LinkedIn’s “John the Baptist” coming before. There was an award-winning movie based on the precursor to this IPO.
Yet, while Facebook raised $16 billion and is trading above it’s opening price, it was considered to be a “failure.” There hasn’t frankly been enough time for the same drumbeat to gather around Twitter, and there’s certainly not the same expectation that it’ll light the markets on fire. (Particularly given the disappointments of Zynga and Groupon.)
Case in point: I doubt an entire industry of reporters will sit in their Aeron chairs hitting refresh on the SEC’s Web site the morning of the filing. It’ll be big, but more Kardashian baby-big than royal baby-big.
2. Dick Costolo is not Mark Zuckerberg. Whether fair or not, tech CEOs are treated like celebrities these days. It’s almost impossible to divorce the performance of a company from how people feel about the CEO. (Just ask Apple, post-Jobs.)
The truth is Zuckerberg has always been polarizing. His age combined with uncommon success. The awkwardness that’s frequently misread as rudeness or arrogance. The hoodies. The wildly inaccurate movie. (Unfortunately.)
Costolo on the other hand is older. He’s bald. He’s not the founder. He’s Mid-Western. People frequently make too much of his experience as a standup comic, but the ability to put a room at ease and be self-deprecating makes him pretty much the anti-Zuck.
There won’t be reports of Costolo missing roadshows, stubbing the street by wearing a hoody and the like.
3. A different mentality. Facebook has been the champion of the hacker culture that’s swept through Silicon Valley in recent years. The ignore-all-rules and “move fast and break things” ethos.
Costolo is not a fan of that spirit. He expects professionalism and demands results. When Twitter moved into its new office building all the previous artwork was taken except for one piece that said: Make better mistakes tomorrow. Screw that, Costolo said. At one of the first all-hands, he gestured to the new campus and told his team that he’d given them everything they needed to be successful and expected them to execute.
Indeed, Costolo is the third CEO the young company has had, and Twitter’s valuation is already priced for perfection. He’s only holding his team to the same standard the world will hold him to.
To commemorate the early talks with bankers, we thought we’d pull together a little IPO wisdom from two key people in Costolo’s life.
The first is Ben Horowitz, who helped Costolo hone his rules for management at Twitter. Last year, at PandoMonthly, Horowitz shared a no-holds-barred description of the hell of being public. The second piece of advice is from Bill Gurley, whose firm, Benchmark, is a Twitter investor. While Gurley acknowledges there’s some hell in being public, he doesn’t have a lot of sympathy for CEOs who complain about it, as he explains in the clip below.
[Image courtesy University of Michigan’s Ford School]