Mike Tuchen recently took Talend public. In the lead up to the offering, he realized that many things he learned while rowing crew in college were lessons he could apply to building his company's board of directors, and ensuring that his team and company were IPO ready.
Taking a company public is a significant milestone, but avoiding minefields as you navigate through your first year post-IPO is equally important to your company's success. I'm CEO of Talend, a cloud and big data integration company that just celebrated its first anniversary of going public. As I look back at the experience – both pre and post-IPO – I realize the lessons I've learned are similar to those I discovered while rowing crew in college. Here are some of my key takeaways.
Set your own course.
My crew team in college was successful because we ran our own race – we knew that if we got distracted by what the competition was doing or what place we were in, it would destroy our focus and slow the boat. My experience growing Talend has been similar.
When I became CEO, our European-based, fiscally conservative board tasked me with finding a path to cash flow profitability while accelerating growth – all with just $40M. That approach required me to run a very different playbook than the other late-stage startups in Silicon Valley – they were spending like mad and growing for growth's sake. Despite what our competitors were doing, we stayed the course, and when we did go public, it was as a balanced-growth, cash-flow-positive company.
Benchmark your progress.
While not everything that matters can be measured, tracking key performance indicators is a great way to drive progress against goals. While in college, I was the smallest member of my crew, so I had to figure out how to make my body as efficient as possible, pound for pound. I began lifting and recording my weights and reps daily, and then increasing them regularly.
At Talend, I knew we would have to run a tight ship, so we relied on data to measure our progress and fine-tune our strategy. When I joined, I worked with my team to benchmark dozens of our business metrics against some of the industry's most successful IPOs. Eventually, we created more than 200 discrete data points that, to this day, we collect and analyze daily, weekly and monthly. Those data points not only helped guide us to a successful IPO, but I believe they also gave investors greater confidence in our fundamentals.
Leverage team changes to your advantage.
Like any collegiate team, ours changed each year as teammates graduated. Those instances forced our coach to reassess our strengths and weaknesses to determine how he could fill vacancies to the team's advantage.
Unless you've built a company from the ground up, as CEO, you've most likely inherited a board (just as new coaches inherit teams). However, the lead-up to your IPO often provides an opportunity to evaluate whether you've got the right board members for a public company. It pays to have discussions with your current board about the new expectations they'll encounter as a public company board member and their plans post-IPO.
Those honest, open conversations can help you determine how long members might stay on the board and help you create an orderly plan to transition to your new, independent public board. You'll likely find that most of your venture capital investors/board members will want to transition off of the board somewhere around the IPO so they can renew their focus on new, early stage investments. You will also need to add new board members that bring the specific skillsets you will need to go public and to lead the company in its next phase of growth.
Post-IPO can also be a good time to make board changes and create an opportunity to increase your board's diversity. As with hiring employees and forging partnerships, you'll find it easier to attract top-notch board candidates when you're a successful, publicly held company.
Don't overhype your story.
Even though our college crew had a great track record, we didn't publicly tout our successes – our coach was a firm believer that the hype would go to our heads and inflate expectations. I believe many of the recent IPOs that came out to great fanfare and then crashed and burned in subsequent months had overhyped narratives.
During those first days and weeks after your offering, you're balancing on a knife's edge – you have very few shares traded, and many large shareholders haven't yet decided if they are in or out for the long term. If there's a lot of hype around your company, retail traders and speculators could drive your stock price to the moon. And when your valuation eventually comes back down to earth – as it inevitably will – you'll face the very real fallout that comes from large stock swings: deflated morale after the initial euphoria, employees that were hired when the stock was high now realizing that their offer is less valuable than they thought, and an unstable and fickle investor base that comes about when all of your long-term holders sell out at the inflated price.
You can’t manage many of the variables that impact your share price, but you do have the ability to dial your presence and message up or down, ensure that investors understand your story, and keep a laser focus on consistently underpromising and overdelivering.
One year after taking Talend public, I look back at it as one of the greatest experiences of my career thus far – one that was only possible because we had a talented team that was in lockstep with an experienced and supportive board. It's been a huge learning opportunity, and through the things we did well and the things we got wrong, I know I've become a better CEO. I'm looking forward to seeing what the second anniversary of our IPO will bring.