Facebook’s IPO is going to create 1,000 millionaires.How will they deal with their newfound wealth? How will the culture inside Facebook change?
We don’t know, but this isn’t the first tech company to IPO and suddenly make its employees rich.
During the first tech bubble it was happening all the time, and it messed with the morale of companies.
Yahoo’s current CEO Ross Levinsohn said that when he was at AltaVista in the late nineties, one of the company’s engineers built a little stock widget for employees to track how the stock was doing on their computers. (AltaVista was owned by another company.) It allowed the employees to monitor in real time their personal wealth.
Sounds like fun, but it was huge distraction and ultimately the company lost to Google.
How did Google prevent the same thing from happening? By aggressively limiting people’s focus on their new wealth.
In Steve Levy’s book, “In The Plex,” he relays this story of what it was like during and after the IPO:
Othe day of the IPO, Wayne Rosing, the head of engineering, addressed an all-hands meeting. In his hand he held a baseball bat. He told the Googlers that if he looked in the parking lot in the next few days and saw new BMWs or Porsches, he would use the bat to smash the windshields.
Marissa Mayer told her team that she didn’t want them checking the stock price during the day. When her workers did not respond with full compliance, she instituted another policy: if anyone who worked for her spotted someone else in the group looking at the stock ticker, all he or she had to do was walk over and tap that person on the shoulder. Then that person would have to buy you a share of stock. After a number of involuntary exchanges, people either stopped checking or learned to hide their peeking more effectively.
However, despite Google’s best efforts it still did affect the company and its culture:
Even the Google masseuse noticed the impact of money, especially when it came to the divide between early employees holding valuable options and those who came later. “While one was looking at local movie times on his monitor, the other was booking a flight to Belize for the weekend,” she said in a book she wrote. “Don’t think everyone wasn’t aware of the rift.”
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