Public valuations remove the breathing room needed to fix operational crises
James Park · Fitbit: James Park · Apr 27, 2020 · at 51:19
Fitbit co-founder and CEO James Park compares navigating company setbacks as a private startup versus managing them under public market scrutiny after Fitbit's stock dropped.
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“As a private company, Despite challenges, your valuation doesn't change very often. It only changes when you raise money, which could happen once a year, once every two years. So if you hit a bump in the road, your employees don't really feel it. We had a product recall where if we had been a public company, our valuation would have plummeted immediately, but at the time we're private. So we just told the employees, hey, look, this is the challenge. It's pretty serious, but here are the steps that we're going to take to get through it. And everyone kind of rallied together. But when you're being measured every day in real time... By the stock price. You're not really given a lot of breathing room to try to fix things.”
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