Stakeholders – Not Shareholders!

I read an article in the New York Times titled “Down With Shareholder Value“.   This has been something that I have thought a lot about the past 20 years.  It always struck me as strange that the reason for a company would be to serve shareholders.  To me it is an equal balance of Customers, Employees and shareholders.  If any of those are out of sync, then the company is lost – or at least not a place I want to hang around.

The problem with being a public company, or even a VC backed company, is that the financial people are smarter and more ruthless than customers or employees.  They have more “leverage” in lots of ways.

Why do I bring this up on my RunSignUp blog?  Well, because I think it is important to make this distinction to our stakeholders.  We have a simple structure since I am the only financial person and the leverage I seek is based around having some great people building great technology that makes the running community happy.  Of course I want a profitable company, but not one that is leveraged with debt or building up the “value” in other people’s eyes so they pay a bunch of money.

I hate (actually I don’t) to bring up Active.com, but after reading the article I went a looked up their stock.  They had a bad quarterly earnings report that caused their market capitalization to drop from $815M to $655M – a loss of $160M in a week.  When you read a summary report, you find they actually did not do all that badly on the financials.  Revenue was up 23%.  They lost some money, but only a few pennies per share more than expected.  Hopefully they are balancing the input of the financial markets with the interests of their employees and customers.

You can see Active’s focusing on their expanding universe of customers by this quote from the press release: “we achieved an important technology milestone by launching the first Hunting and Fishing permitting application”.

I suppose that is good for RunSignUp’s financial prospects since we are focusing on one running a running business for runners.  See – we are focused!