Scott Jon Siegel knows Zynga from the inside out. The game designer was at the casual game company as they grew to becoming a buzzed-about company, working on titles like Café World and Scramble. He left a while back and is now at PopCap Games. Like lots of other game creators, he looked on with concern as Zynga shed 520 peers on Monday in a massive lay-off. But, unlike lots of other people, Siegel has been offering some post-mortem twitter wisdom from Zynga’s meteoric rise and seemingly imminent fall. Check out the highlights from the #lessonsfromz hashtag below.
This one's my favorite:
"An IPO is an opportunity for a bunch of people who know nothing about your business to determine the value of the work you do."
I'll never understand the rush that businesses get into to "go public." It just makes no sense to me. It gives you an initial surge in cash, and from then on your company lives on the fickle whims of the market. You no longer have the flexibility to ride out market trends, take risks, or do what you feel is right regardless of how much it affects your bottom line. Your shareholders own you.
All they care about is whether or not you are padding their portfolio. They don't care about the long term of your company, they just want to see stock prices go up. If they drop, even a little bit, then heads roll, people lose their jobs, and once healthy company cultures become toxic, leading to a death spiral where, at best, the company becomes mediocre, and at worst implodes in on itself (as is happening with Zynga).
Contrary to popular belief, being content with your level of success in business is not a bad thing. Innovation does not require rabidly chasing after just one more stock point, it just requires a healthy culture where people are allowed to do their best work possible. I wish that more companies would turn down the temptation to go public and focus instead on slowly building up their reputation and revenues by making quality products and services.