YES!
I just wanted to remove the mystery or any possible doubt surrounding what my answer would be to the question “if Coupa goes public, will it ruin the company?”
By the way, what prompted the question (and this post), was a very recent Bloomberg interview with Coupa CEO Rob Bernshteyn. By the way – and I will be talking about the interview shortly – you can access the video by clicking on the image below.
Click here to access Bloomberg intervie with Coupa CEO Bernshteyn
Now you may be wondering if such an opinion is warranted. In other words, am I basing my YES on fact, or simply observation and/or opinion?
That’s a fair question.
In an earlier post I had suggested that Wall Street – including investment bankers, are bad for business. To prove my point, I made the following reference to Ariba:
In what many consider to be a controversial article titled The Myth of Ariba, a former executive for the company said the following; “Ariba was a real company with a real product that got swept up in its own hype, with unfortunate consequences,” and that “Ariba was basically a fraud . . . creating [the impression that Ariba was constructing a global marketplace]. . . even though this was seen as being “a rather impossible task.”
According to the article and related book, they “went through the motions” of building this marketplace because “the stock was the only thing that mattered. A valuable stock gave Ariba currency it could use to buy other companies.” In the end, “Ariba started out very much as a real company, but was actually blindsided by the Internet boom.”
So there you have it. It appears that I have at least one example that would justify my YES.
Besides rewarding a company for the wrong reasons, a move onto Wall Street can also change the company’s culture. Check out the following excerpt from a CBS Moneywatch article:
In retrospect, I think I would have been better off if UPS had stayed private . . . Institutional investors do most of the buying and selling and they don’t bleed brown the way we did . . . I have to say yes, (the culture has changed) . . . I don’t think things have been the same since going public. – Retired UPS Exec: ‘How the IPO Hurt the Company Culture and My Retirement’, CBS Moneywatch article
Given that a March 15th, 2015 Forbes post by Josh Bersin referred to culture, or more specifically company culture, as being the “hottest topic in business today,” the Ariba and UPS examples should get your attention.
Even those organization that are in the early throes of success as a result of securing Series A funding, recognize the importance of culture – especially when it comes to their hiring practices. An Inc. Magazine article by Minda Zetlin speaks directly to this last point.
Coupa Glassdoor rating – November 10th, 2015
This is why Bernshteyn’s assertion that he still approves every hire and reviews every resume because as he put it “one of the most important things to us is culture,” stood out.
I also found it interesting that when Bloomberg’s Cory Johnson opened the interview with the remark “should I congratulate you for having a company that’s been valued over a billion dollars while you’re still private, or do you need a hug” Bernshteyn, without skipping a beat, said the following:
“I think you should congratulate me for the value we are creating for our customers, at the end of the day that’s what it’s all about – these valuations will ebb and flow along the way, but I think the straight focus on creating real measurable results for your customers will stand the test of time any day.”
What does this all mean?
Well, if Coupa does decide to go the IPO route and, can maintain the focus on the customer while preserving the company’s present culture, then they could very well pull it off. In fact, they might even make a skeptic like me a believer – at least in this one instance.
Let’s change that YES to a MAYBE NOT . . . for now.
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Procurement Insights 
Bill Kohnen
November 11, 2015
I saw this interview and thought that the Bloomberg interviewer was not really that professional yet Mr. Bernshteyn did a good job of keeping things on track.
That being said while I understand the concern about maintaining culture it does strike me that such a hands on approach by a CEO is not sustainable or healthy as a company becomes global and has 500+ customers, and is expanding. I suppose that it is true at many startup pre IPO companies but it does seem that particularly in the procurement space there are lots of executives that carefully try to control their message while at the same time micromanage.
Perhaps the reason is that at some point most solutions providers have become really more about “marketing hype” rather than a truly differentiated product. Arguably there is very little difference in the offerings anymore.
The only real differentiators I see are
1. If someone is really interested in the possibility of a fully integrated solution spanning complete end to end with ERP and other integration. (At some point SAP may deliver this with a mash up of Fieldglass, Ariba, Concur, their HANA platform and Fiori user interface) However, this is not something available now.
2. A real difference between providers right now is level and quality of support. In this area the feedback I have seen is Coupa customers tend to be very happy with the people they work with post sales. This advantage could very well be threatened if Coupa went public.
piblogger
November 11, 2015
Interesting take Bill, and one with which I would be in general agreement. Especially relating to your point 2.
I read an article from 2012 about Facebook going public and the potential impact that it would have on the company’s “Hacker Way” software development culture. By the way, a year and a half after Zuckerberg’s Hackers Way manifesto, it was reported that the company had put “the brakes on the hacker way.”
This of course is not the only example of the impact of an IPO on a company’s culture, but like your reference to Coupa’s post sales support capabilities, changes, if not inevitable, are likely to happen – and not necessarily for the better.
This brings us back to a question I have been asking for a long time . . . is Wall Street bad for business?