Disclaimer: I couldn’t give two shits about Pandora. I think it’s a crap music service and their “wide selection” of music isn’t as varied as they claim it to be. I hear the same garbage no matter how many stations and filters I add to it. I am actually jamming out to Spotify while I type this out because I’m not a punk.
About 20 minutes ago Pandora announced that they were bringing back their lord and savior Tim Westergren as CEO. Tim was their founder and lead their “Music Genome Project”. To my knowledge it’s just an algorithm that tracks what you listen to and gives you other crap that you might want to listen to.
A lot of companies think the best play to bring a company back to prosperity is to bring the founder on board, cause they are a “visionary”. That idea is working very well over at Twitter as you can see…I
Pandora’s ditch of income has been growing YoY and is soon to unearth over in China if they keep digging.
Pandora Media Inc., $P is already down nearly 8% in the first 10 minutes of trading.
I don’t think this change will matter. What innovation is going on over at Pandora? None that I can see. If anything a larger tech giant will scoop them up sooner or later and gut them like fish.
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That’s just it. Somewhere along the line, the whole business model of the valley ceased to be about “build cool shit and make money off it” and became “grow fast enough that two companies with deep pockets will get into a bidding war for you.”
Building technology made sense when you stayed private for 2-3 years, raised money by going public, and if your technology was accepted, your business hopefully made a profit and your shareholders were rewarded by being liquid at a suitable multiple.
Today’s tech business model – growing fast at the expense of profitability makes sense when you stay private for 10 years, the IPO is how your VCs (and, if they’re lucky, the founders) exit, and from their perspective, why should they give a damn what the stock price does after that? I’m a bit jaded and probably overstating it, but in tech, the public markets are the dumping ground where the smart money exits, not the place to raise capital. The IPO is the new down round.
I like the way you think. I have been echoing this sentiment regarding IPOs for a little while now but none of my simpleton friends seem to understand.