As I wander the digital universe, I see promising signs things are moving back toward normalcy. As I prepared to check back on one of the precious few IPOs in the last year, I expected OpenTable to have gone through the hype cycle in late May and be back in the $14 range. Imagine my surprise to find it still moving in the $29 range a couple weeks later – a nice surprise to say the least. Add to that the treading-water ride for RackSpace and SolarWinds over the last year, and things seem to be improving.
At the same time, I ran across this cartoon on one of the smarter blogs I follow: Dharmesh Shah’s OnStartups.com. It gave me a moment of pause as I cringed about the old days of vaporware and sky-high valuations. Please tell me these winds aren’t blowing again!?!?! It also reminded me clearly that those days might be fondly recalled by a few, but the competition for funding has moved well beyond the ‘deck-and-a-dream’ realm.
The reality is investors have their choice of almost any company or idea in this market – and there are very few premiums for anything! You might have the greatest idea in the world, but raising $1M to build it on spec becomes really difficult when there are established businesses needing capital to remain solvent or reasonably expand.
So the real question for founders is this: Are you geared up for long-term viability? Can you self-sustain for a longer-than-normal window given the economic climate? OpenTable built their business for 11 years before cashing-in during 2009. That’s the sign of a healthy, well-run company that has weathered the ups-and-downs of the market – all while solidifying their single value proposition. Here’s to hoping we see more tech IPOs that reward those who work hard, play smart and have great long vision.
Tags: IPO, onStartups, OpenTable
