Full disclosure, I worked with Nick and Omar at Gusto. I saw firsthand how much software can help an ops team. Since we didn't have Flowdash at Gusto, we often scrambled for resources to empower our operations team. We also probably could've done a better job responding to user feedback since we were so resource constrained.
Having a tool that the Ops team can truly own is a game-changer for that iterative feedback loop and frees up the eng team. Really looking forward to seeing this product grow.
The watermelon interview was no joke and not a rubber stamp. I wasn't on the watermelon crew but it was a real badge of honor at Gusto to "represent" Gusto's values.
When we hired 200+ people from 2015-2016 across two offices, the watermelon interview was critical to make sure we were hiring the right culture fit Gusties.
It's not surprising that it works. It's pretty similar to how henry schein grew and kept its culture. They do the same thing in many ways, looking for compatible culture, during acquisitions as well.
I used to be a PM at Gusto so I can add to Eddie's answer. As Eddie mentioned, it's non-trivial to keep the existing applications running as well as they do. That being said, a non-trivial amount of time/resources is spent making an already amazing product that much better. For example, my friends just launched a new product that lets you pick your payday (https://techcrunch.com/2018/06/21/gusto-flexible-pay/). To get this to work, there's a lot of data science involved to make sure you're not exposing Gusto to financial risk (it's effectively lending money). Since taxes are withheld with every paycheck, the payment flows associated with flexible pay become incredibly challenging. They're an amazing team. Go Eddie!
I think there's also some anchoring bias that happens with easy mental math calculations like 20 on 80, or 40 on 360, since the financial fundamentals don't matter at the earliest stage companies.
I'm confused by this comment. Doesn't Box sell an actual product that actual customers pay for? That's revenue.
Now if you're referring to profit, then there's enough precedence of (technology) companies choosing to invest in operations over generating a profit for growth. Amazon is barely profitable; Twitter still isn't. There's even financial engineering reasons to run a deficit. Why pay taxes when you can re-invest in your company's growth and use the carried losses as a future tax shield? Unless you assume Box and comparable companies are running a Ponzi-like scheme, which I don't think you are.
I think we can agree that investors at large firms who invest in IPOs like Fidelity and T.Rowe Price are not idiots. They use the information that is available to them and make a determination on valuation. If they make an investment in the IPO, their investment thesis is that this stock will go up (some companies do flip at IPO but it's a small minority. Source: I used to price IPOs for a living).
The market isn't a homogenous mass. It's filled with thousands of opinion-makers like you. Your opinion is entirely valid but it's weighed against the opinions of thousands of others who can shape Box's valuation. And that weighted opinion says Box was worth X six weeks ago, and now worth Y.
I wonder if there's a lagging indicator of tech bellwether decline in innovation/disruption when they introduce a dividend.
For example, Apple had a dividend in 1995. Then in 1996, Jobs came back and nixed it. Microsoft issued its first dividend in 2003. Cisco in 2011. Oracle in 2009.
As a former ibanker, I should be all for financial engineering. But when companies can do "actual" engineering, I'd prefer to spend money on growth if possible. If not... then, I guess the dividend makes sense, hence my earlier assumption.
When Jobs came back to Apple, Apple was not in solid financial health. That's not a good time to have a dividend.
If they needed to deploy all of their cash for growth, I'm sure they would. The trouble is that they have so much cash that it's likely not clear how to deploy it in a way that is true to Apple (ie they could buy some big companies or add 100 products to their portfolio, but that's not the way they roll)
Completely agree. Facebook's feed is its most valuable real estate and it's primarily used for photo-sharing. If you "carpet bomb" it with requests and gaming spam, it becomes irrelevant.
The discrete separation of Facebook apps may solve the problem that companies like Yahoo are facing (to some extent): The sum of the parts is greater than the whole.
If you want an 11 minute read, I covered this at great length in a blog post two weeks ago on Medium: https://medium.com/p/b3c97b87a183 (4.4K views and counting).
Yahoo's different parts cannot be traded and thus have no liquidity. There's a huge liquidity discount associated with that.
If Yahoo were to sell the pieces of Y!Japan, Alibaba, etc. on the open market, it would have to do it a structured and delayed process or else it would flood the market, dropping the respective stocks. More discount.
I think it's disingenuous to project motivations for Michael Lewis. Is he shilling for the buyside the same way he was shilling for the Oakland A's? In my opinion, the only thing we know based on facts is that Michael Lewis, the author, has one objective in mind: To sell more books.
In order to sell books, the story and narrative has to be compelling. Is the story of a Canadian guy making millions of dollars at his trading desk quitting his job and starting a company (we love startups!) that may undermine a controversial trading tactic a compelling story? Absolutely. Is the story of Einhorn or Cohen or Icahn doing things like insider trading or activist investing equally compelling? Probably not, since it's on the cover of the WSJ or on CNBC every week.
Michael Lewis does not have a responsibility to educate main street about the nuances of HFT, although as a secondary benefit of his noble pursuit to sell more books, he does shine a light on the topic. In this regard, Lewis is exceptionally successful. He's sparked a debate, he's created controversy, he's made smart people discuss a topic they had previously less interest in.
Think about what Moneyball did for professional sports? Lewis was hardly the first (e.g, Bill James) but he popularized it so we, the general population, could discuss the topic with some conviction and knowledge. If he can do the same for HFT and trading in general, then good job. And he sells more books.
"Is the story of Einhorn or Cohen or Icahn doing things like insider trading or activist investing equally compelling"
Why do you put activism in this sentence along with insider trading? Are you implying that it is morally reprehensible in the same way that insider trading is? Activism is in no way illegal and many consider it a counter against corporate cronyism that can infect public corporations due to the principal/agent problem.
I put them together because they're news items on financial shows/periodicals. I am not confusing the two (yes one is illegal, the other can do good). I apologize for the unintended obfuscation.
Full disclosure, I worked with Nick and Omar at Gusto. I saw firsthand how much software can help an ops team. Since we didn't have Flowdash at Gusto, we often scrambled for resources to empower our operations team. We also probably could've done a better job responding to user feedback since we were so resource constrained.
Having a tool that the Ops team can truly own is a game-changer for that iterative feedback loop and frees up the eng team. Really looking forward to seeing this product grow.