Good Options, Bad Options

What are your shares worth?
    Photo by Est Bleu2007

I’ve been laid-off once in my career. It was just after the .com bomb. I was at this company for only 2 1/2 months.  During the employment negotiations I was offered quite a bit of stock options. I had just seen the Simpson’s episode about the .com company that issued it’s stock in the form of toilet paper rolls with each square equalling one share of the company. I told them that while I would certainly accept stock options I wasn’t going to take the options in lieu of decent pay. I told them the amount of $$$ that I would work for and they finally accepted my counter offer.

It became clear that I was the only new hire that had not been talked down in my salary requirements by accepting liberal stock options. After being at this company for three days I knew I had made the right decision. The service that this company was providing was, in my opinion, pathetic. While I won’t divulge the name of the company the service provided was an early version of VoIP for call centers. The software had been developed at a call center and then this call center was so pleased with itself it spun the software into it’s own company. The goal of the employees of this new company was clear:

Go Public!

The software lacked. The services provided were laughably pathetic. Almost all of the money available had come in from Venture Capitalists. I looked around: Almost everyone there thought that all their problems would be solved when the company went public. Going public WAS the exit strategy. From the office doors of Vice Presidents to cubicles of developers and engineers a similar theme was expounded in the form of print outs: Go Public. There was always a date that was a goal for going public. In the 2 1/2 months that I was there the date was pushed back three times.  I would hear of customers calling in and complaining about service interruptions and all-in-all poor service but the goal for everyone wasn’t resolving the issues at hand as much as shutting the customers up so that we can GO PUBLIC. I even heard one Vice President say “Once we go public we won’t need this customer anymore.”

I was laid off with about 40 or so other people. I believe the company had relieved about 60% of its workforce in one layoff. I chuckled when I heard the news. I packed up my desk and soon I was enjoying the weekend with my Great Dane. I took the one month severance pay (remember I hadn’t even been there for three months) and landed a great gig the following Monday. I had learned some excellent lessons in the preceeding three months about priorities.

There certainly is a time for “going public”. I’m not pretending to be an expert on when this time is or should be. There are far wiser and more intelligent folks than I to explain that. I just know that if I, as a customer, ever run across a company that seems to spend most of its energy on preparations for going public I am going to run so fast in the other direction that flames (not just blue darts) will literally shoot out of my ass.