Wall Street and the technology industry have long had what one might describe politely as a rocky relationship. Since the dot-com bust, the Street has seemed intent to never again fall into the same trap of over-exuberance, and is thus wary of anything that even smells like tech. The latest evidence of this theme is the recent correction in the enterprise software space which saw market leaders like Salesforce and Workday erase nearly a year’s worth of gains.
It’s with this as the backdrop that Box’s Aaron Levie joined Pando’s Sarah Lacy on the Southland stage today to discuss the joys of the public markets, the future of enterprise, and the forthcoming Box IPO (within the boundaries of SEC quiet period regulations).
On the topic of the recent shift in Wall Street sentiment, Levie brushes it off as a natural correction following a concentrated period of potentially excessive exuberance. Most importantly, it’s not, in his mind, indicative of a broader shift in the secular trend.
In absolute terms, where these companies are, I think they are in incredible positions both from a public market standpoint but also from how they’ve been executing. Even the entire last quarter of revenue and numbers that these companies have put up, the secular trend is still occurring and without any friction right now. I think it was more of a public market dynamic, where, you see these mini bubbles every couple of months and I think this was just a small correction of that.
In terms of what that means for Box’s IPO prospects, Levie was careful not to speak too specifically about the company’s plans to go public. But from a general strategy perspective, he’s not a huge believer in the concept of market timing. When asked if Box “has to go public,” he said:
We don’t have to go public, but we’re sort of going public. We certainly haven’t launched our roadshow, but going out in a market where it’s more calm, not necessarily that the highs have to be as high as they were, but certainly the volatility has been suppressed a little bit, that’s I think important.
In terms of the psychology that’s required to navigate these often choppy waters, Levie looks to advice from his investor and mentor Ben Horowitz. He recalls the renowned CEO coach saying, “It just requires complete conviction of what you’re building and a focus on the long-term.” To which Levie adds, “If you build something of incredible value and you build an incredible culture, near-term market fluctuation is not that impactful.”
Being a CEO means constantly making trying decisions. If widely reported rumors are true, Levie has had multiple opportunities to sell Box. But he long ago decided that the opportunity to change the way companies create, interact with, and store their data was more interesting than cashing out and searching out a new challenge. And so with some $414 million in venture capital raised, the company will go public sooner than later.
Recalling the early story of losing Mark Cuban’s support for Box’s freemium business model, Levie says, “I think in some way, Mark Cuban trained us very early on about the volatility of markets – for that we thank him!”