When a company finally goes public, it usually marks the culmination of an extended run of fundraising to fuel fast growth. And as founders take in more money, they typically must fulfill increasing expectations for the company to act in certain ways and pursue new objectives.
But that doesn't mean that as they mature, companies have to lose touch with what made them innovative start-ups in the first place. In fact, the following newly public companies still have strong ties to their original founders and manage to maintain much of their early start-up flair.
—By Jeremy Quittner
Posted 23 June 2015
The reviews site Yelp was launched in 2004 by Russel Simmons and Jeremy Stoppelman, both former software engineers at PayPal, after a conversation about why it is so hard to find a good doctor. Though Simmons stepped down from the company in 2010, Stoppelman continues to keep a tight rein on things. He's turned down offers to acquire the company from Google and Yahoo because they didn't line up with his vision.
Since its 2012 IPO, Yelp has grown to feature 71 million reviews on businesses in 29 countries. For 2014 it boasted an annual profit of $36.5 million on $377.5 million in revenue. "It's helpful to be able to say, 'This company is my identity,'" Stoppelman said. "I know how and why it was built in the first place, and I know where to take it in the future."
The charismatic Nicholas Woodman may be one of the biggest reasons GoPro, which went public in 2014, sells so many of its high-endurance HD video cameras. In fact, in its initial public offering papers, the company actually points out its dependence on its founder and CEO as a potential risk. But Woodman has steered GoPro to five consecutive years of profitability, in the face of major challenges from the likes of Apple and Sony.
Revenues for 2014 increased 41 percent to $1.4 billion. "It still drives me, that fear of failing as an entrepreneur and going to work for someone else's dream," Woodman said recently.
Box is one of the biggest cloud enterprise storage companies around, counting among its 45,000 paying customers General Electric, Gap, Safeway and eBay. But it still operates with substantial direct input from its co-founders, Aaron Levie (now Box's chief executive) and Dylan Smith (now chief financial officer).
The company the childhood friends launched in 2005 has grown to 1,100 employees today and went public in early 2015, raising $160 million. "Probably the biggest value that I add to this company is reminding people to constantly push on the scale of opportunity—to realize that they can do something 10 times bigger, 10 times better, 10 times faster," Levie told Inc. magazine.
The popular online platform lets customers order food online from local restaurants. Founded in 2004, today GrubHub processes orders for 30,000 restaurants in 800 cities. But it wasn't always that way: In its early days, co-founders Matt Maloney and Mike Evans walked door-to-door to sign customers up.
After a three-year compound annual growth rate of 1,300 percent, GrubHub went public in April 2014. And investors love how the company's original business model remains largely intact, sending shares up 31 percent on opening day and netting the company $192 million. "When the business model is complicated, it's much harder to explain that value to investors and makes them less likely to buy in," Malone said.
After falling chronically ill, waitress Margaret Isely turned to nutrition when conventional medicine failed to help her. By eating wholesome, natural foods and taking dietary supplements, Isely steadily improved, leading she and her husband, Philip, to become "health crusaders" and to eventually start Natural Grocers in 1955.
Still thriving six decades later, the health-food products company is now run by the second-generation siblings— Zephyr, Kemper and Heather—and in 2014 had net sales of $521 million from 93 stores, primarily in the West and Midwest. The leaders have plans to add 1,000 more stores but are striving to maintain the company's original small-time feel, offering employee perks, like a staff nutrition coach, and continuing to sell only entirely organic produce and products.
It took four years of internal discussions for Natural Grocers to go public in 2013, which brought the company $91 million. "We run the business on a consensus basis rather than an adversarial basis, so essentially we all have to agree unanimously or we don't do it," said Kemper. "We're a little bit idiosyncratic."
Whenever there's a huge data breach by hackers, FireEye is the go-to company, for its expertise in forensic sleuthing deep into compromised computer networks. In recent years, JPMorgan Chase, Sony and the health insurer Anthem have all sought help from the Milpitas, California, cybersecurity firm, which was founded in 2004 by Ashar Aziz, a serial entrepreneur who had previously worked as a Sun Microsystems engineer.
Aziz still has a hand in the creation of the company's products and services, which include a state-of-the-art virtual machine technology that responds to threats in real time. FireEye, which has 2,600 employees, generated $425.6 million in revenue in 2014. "I can't lose sight of the responsibility and the trust the customer puts in us to protect them," Aziz said. "It is a solemn trust, and we can't let them down."
Solar City has an ace in the hole helping to keep it entrepreneurial amid rapid growth: Elon Musk, famed inventor of the iconic Tesla electric car, who is board chairman at the sustainable-energy company. In fact, Musk is cousins with founders Lyndon and Peter Rive, who want to simplify the way mom-and-pop contractors currently install solar energy panels, making the consumers' transition to solar as easy as flipping a switch.
The company, which was founded in 2007, is now the biggest installer of solar panels in the U.S., operating in 15 states. It holds an estimated 30 percent share of the market, an amount that's doubled since 2012. Lyndon Rive, the company's chief executive, explains his reasoning for taking the company public in 2012, which also sums up his management philosophy: "Trust your instincts. There will always be naysayers, but they don't understand your business as well as you do." SolarCity had $255 million in revenue last year, but operated at a loss of $375 million.
Who doesn't love the American hamburger-and-fries story? In the years between its 2001 founding by restaurateur Danny Meyer and its IPO in early 2015, Shake Shack grew from a single food cart to 32 stores on three continents. But CEO Randy Garutti has stuck close to the family-friendly atmosphere of the company—known as the "antichain chain"—which has attained something close to a cult status for its all-natural ingredients and hormone- and antibiotic-free beef.
Shake Shack's 2014 revenue surged 43 percent from the previous year, to $112 million, but Meyer stresses that the company's financial performance isn't his primary focus. "Nothing [has] mattered to me more than surrounding myself with a great staff who are fun to be with and who want to make the place better, and pleasing our guests," he said.