Today’s successful debut on the Nasdaq stock market by the ride-hailing company Lyft could be the start of a new tech initial public offering boom, with Lyft’s larger rival Uber, the social media company Pinterest and Slack, which provides tools that aid online collaboration, among those reportedly planning to raise funds by going public. And that has got advisers to IPOs salivating at the prospect of one of the strongest years for stock market launches in some time.
Not that everything in the technology garden is rosy, of course. Facebook, in particular, continues to make headlines for all the wrong reasons. Even its attempts to atone for its mistakes have come in for heavy criticism. Part of the critique of Facebook is down to its size and hence dominant position — like it or not, Facebook has become the means by which people all over the world communicate with each other, whether it is through Facebook itself or through its other entities, WhatsApp or Instagram. However, if we have learned one thing from this increasingly technology-driven age it is nothing is necessarily for ever.
One of those who think that Facebook could yet go the way of previously dominant technology giants, such as Yahoo or even its predecessor in the social networking sector, Myspace, is Stephan Paternot. He found fame as the youngest-ever chief executive of a public company when theglobe.com, the social network he and fellow Cornell University student Todd Krizelman created in their dorm room a decade before the emergence of Mark Zuckerberg and Facebook. It turned out to be a short-lived experience as theglobe.com was one of the casualties of the 2001 dot-com bust. But Paternot is back in the public eye reminding us — through the screening of the “hybrid” dramatised documentary series Valley of the Boom and through the twentieth-anniversary re-publication of his vivid memoir A Very Public Offering — that success can be sudden and fleeting.
Essentially, Paternot — who now runs Slated, which claims to be the first online film finance marketplace — argues that, while the likes of Google, Facebook, and Snapchat may be popular now, they could be headed for disaster. Each company needs massive course corrections—specifically when it comes to data and privacy, he says. “Google, like Facebook, are juggernauts. But just like the Titanic, which was a state-of-the-art juggernaut at the time, they are increasingly hitting small icebergs. And bigger ones lie ahead.”
Paternot, who sees his book as a way of offering “lessons for a new generation of entrepreneurs”, says he does not believe these companies can do the about-turn required. With everybody now focused on privacy and data, “a counterculture is emerging on the internet,” with a lot of new innovators. In other words, in an environment where disruption is the name of the game, even (or maybe especially) the biggest players are at the mercy of fresh disruption.
One way or another, it looks like we can expect the tech sector to throw up a fair bit of interest in the coming months. And it may not be the smooth ride that investors are seeking.
