Comeuppance
by Miki SaxonTech currently has a high profile for arrogance, not to mention chauvinism and bigotry, with Google, Apple and Facebook are its most public whipping boys.
However, their comeuppance came with the intense media focus that will likely force them to at least put some effort into cleaning up their respective acts.
Not like their psychological brethren on Wall Street.
And while tech has a modicum of excuse that stems from age—its frat house culture has gotten worse as entrepreneurs have gotten younger—proven by the numbers, i.e., more women entered tech in the 1980s than do today—Wall Street has none.
The investment banking world has always been a bastion of white, male elitists; and hardcore harassment—an old boys group that didn’t give a damn what anybody thought.
Arrogance has been synonymous with investment bankers for decades, so seeing it kicked in the teeth by upstart tech arrogance was exhilarating.
Google’s Larry Page created his own acquisition yard stick,
The toothbrush test: Is it something you will use once or twice a day, and does it make your life better? …The esoteric criterion shuns traditional measures of valuing a company like earnings, discounted cash flow or even sales.
Page, for example, is looking for “usefulness above profitability, and long-term potential over near-term financial gain.”
Potential and usefulness are esoteric concepts to most bankers and “long-term” isn’t even in their vocabulary.
Bankers are fine with the hard stuff revolving around money, but are often useless on human side.
But often, when big tech companies are looking to grow through acquisitions, it is the culture and vision, not the earnings and revenue, that are of paramount importance.
Of course, investment banks need to lose a lot for it to really start mattering, but it looks like they are.
The acquiring company did not use an investment bank in 69 percent of American technology acquisitions worth more than $100 million this year, according to Dealogic.
All I can say is that it couldn’t happen to a more deserving group of guys—their comeuppance was a long time coming and it’s hitting the only place they might notice—their bank balance.
Flickr image credit: Chris Hartman