If Coupa goes public, will it ruin the company? by Jon Hansen

Posted on November 11, 2015

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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

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.

IPO Coupa3

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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