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MySQL Hits $50 Million Revenue, Plans IPO
An anonymous coward writes "MySQL, purveyor of the open-source database of the same name, is on the road to becoming a publicly traded company, bolstered by $50 million in revenue in 2006. "It's still in the pipeline," Chief Executive Marten Mickos said of the plan to hold an initial public offering of his company's stock. He declined to discuss when the company planned to go public, but said, "We're making good progress, doing all the things we need to get done.""
Mickos said. "And by going public you get the currency to do acquisitions."
I don't like that. I like MySQL for what it is. Not what is can do with cash or depending on stockholders approval...
This worries me. I don't think the street's interests match up with open source communities or the private companies that make a living off of them. The street likes bold moves for short term gains. OSS demands slow(usually) organic growth and consensus building. A MySQL controlled by arms-length investors might throw an error, how will Mickos catch?
h tml comes to mind.
This http://www.codinghorror.com/blog/archives/000842.
If they offer a second class of shares(dividends but no voice) then maybe it will work, but I'm not sure there's a point in it.
I mean seriously, remember how much Oracle is being a dick when they bought PeopleSoft? And now MySQL with "only" $50 million in revenue is going IPO?
I mean hell, remember this? A private firm can turn down an offer, but a full public company has to go to its shareholders.
Its not about the software, its just that MySQL is a nice company that worked hard to get where it is. I just don't want to see it get destroyed because they just needed a bit more capital.
I call B-S. Shifting to a public company means they have to meet the quarter by quarter growth demanded by Wall Street. I've watched small companies with similar revenues get destroyed by this. It also means if they float too much stock, they're fair game for acquisition. Call this a liquidity event to repay early investors, nothing more.
I must say I disagree with your analysis of IPO. But let's first back up. It was in 2001 that the founders of MySQL decided to get venture capital on board and to go for business growth and an IPO or an acquisition in the future. I don't know if you were around back then, but that would have been the right time to ask why the founders wanted an IPO.
Then to your analysis. I believe that an IPO has the opportunity to boost your financial resources for a very long time. I also believe that you don't have to lose control over your company. Control is lost (in my mind) if and when a company stops to grow - no matter whether the company is public or private. Even if you own all of a private company - if it does not grow then you don't have too many options as to how to run it. So although you may not have lost control to another shareholder, you have essentially lost control to the circumstances.
And then there are other benefits of IPO. It gives you a currency for making acqusitions. It gives you exposure and typically add to your credibility among conservative customers. And it can be highly inspirational for the employees.
Make sense?
Marten
Thank you for responding. The fact that you are engaging in an open communication with the community like this is probably a greater comfort than the actual answers you give. That said, I have always been good at poking holes in debates.
'Risk of being bought out. - The best protection against this is fast growth. If a company doesn't grow, then it is at risk of being bought no matter whether it is private or public, large or small. (So if you want to contribute to us - then refer us to as many paying customers as you can!)'
That certainly makes sense. Is there any assurance that such growth will occur? Is there more to this move than a spin of the roulette wheel coupled with a great deal of optimism about the outcome?
Oracle already knows they want to purchase MySQL. Is there any way to protect the company if they move to make that purchase right away without giving the company a chance to grow?
'Risk of company culture becoming too corporate-like. - We try to avoid this by being very focused on cultivating our unique values. We add more structure and more procedures all the time, but we also try to stay free from bureaucracy and we always encourage our employees to make bold decisions.'
I can't really poke a hole in that. But would like to remind you; Google had a 'do no evil' policy as well. That policy and greed battled within the company and in the end, greed won.
'Risk of openness being at risk as a public company. - We make sure that all our investors (current and future) understand that the freedom of our software is vital to the success of MySQL. We also try to be open about everything else: bugs, plans, events, etc. But here we also know there will be something of a difference when going public: we will have to abide strictly by SEC rules and not disclose financial or other vital business information in any other way than publicly to everyone at given points in time.'
Do you mean to suggest that bug reports and other things that concern the community will only be released in SEC filings? Surely not, companies release information that concerns their business through the press and other outlets all the time.
'Risk of "pump and dump" investors driving MySQL strategy in the wrong direction. - Naturally a company will have to follow the instructions from its shareholders, but we believe that we have and will have strong and long-term investors who understand the value of strategic resilience. These investors will encourage us to invest in what gives the best value over time.'
Isn't this nothing but pure optimism? Anyone can purchase the stock. Are MySQL public stockholders likely to share the same characteristics as the stockholders of most companies?
'Risk of quick return to investors negatively affecting the MySQL entity or application. - I actually believe the opposite - that a successful IPO for MySQL will give us a boost in innovation and development. I believe that as a public company MySQL would attract even more innovative partners and brilliant employees.'
Don't many of those investors play key roles in MySQL today? Isn't there a good chance that many of those individuals will use this as an opportunity to cash in? Also, increased financial resources does not equate to superior results. Microsoft is probably the most typical example of this.
'P.S. I can of course be wrong in my risk assessments here and in other responses on this thread. That's why I post them for all of you to read - in the hope that you will provide your feedback and suggestions.'
Good luck Mark. I'm sure having you at the helm of the company gives everyone comfort, I know it gives me comfort. I wish you and MySQL the best and hope going public works out for you.