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I find a dark irony in the fact that a company which peddles one of the most cost-ineffective devices for recognizing employee or channel performance, and staked their credibility on one of the most dubious concepts ever for performance management (the ludicrous and dangerous “Crowdsourced Performance Review”) has now seen fit to air all of their financial “dirty laundry” for the world to see in an IPO filing that, as a novice investor, strikes me as doomed to fail spectacularly.
Over the past twenty-five years, I have witnessed some of the most remarkable disasters brought to the business services marketplace, from the web-crazed days of Flooz and Beanz, to the Hindenburg-like arrival and departure of Amazon.com in the recognition and rewards space, and the frenzied rush to load debit cards when cash was declared the “king” of all things recognition. Flooz and Beanz went away when the first dot-com bubble burst. Amazon got caught with its pants down and realized that having an army of peddlers out there selling merchandise for awards purposes left them exposed to have to charge sales taxes in all 50 states. And money was outed for what it is: great for compensation, but a horrible idea for rewarding and recognizing incremental productivity.
So here we are in 2014, with the latest truly bad idea that involves a company which has loaded up with red-ink cartridges to print their income statements, while publishing audited financial reports showing a profound inability to meet their short-term debt obligations without a quick injection of liquidity, readying themselves for what may be the most embarrassing IPO in memory. This company (which I shall refer to only as “Globo”) would appear to need money, and is willing to shoulder the scrutiny of merciless investment analysts in order to try to get some. What I don’t get is why anyone would buy into a company that: (a) sells a pure commodity product (one that does not deliver value to the buyer on any level); (b) is known largely for a laughable HR premise that serves no interest, beyond possibly that of litigators; (c) doesn’t seem to be able to find a path to profitability no matter what they have tried; and, (d) has 30-40% of their business seemingly wrapped up with one customer. Does that sound like a recipe for success to you? Me neither.
The lessons to be learned here are many:
First, if you are going to attempt to brand a commodity dispenser, you need to have some significant and patented value-add. Poor “Globo” has neither. Anybody can buy gift cards for WalMart, mark them up 30% and try to sell them. The question is: Who would buy them? And who would come back for more?
Second, if you are going to go so far as to have your CEO write a book, it is generally a good idea to have something of value to say. Not just “different” or “revolutionary”, but viable and sustainable. The notion of rating your employees’ performance based on how many friends they have and not the results they generate has the unanimity of appeal of outcome based education, but with fewer subscribers.
Third, Abe Lincoln knew “you can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.” Having read the S1 filing for our subject firm, you would have to take the leap that Mr. Lincoln did not know whereof he spoke in order to buy into the value of an investment. It’s not generally a good idea to challenge Abraham Lincoln on just about anything he said.
My advice to anyone who is still with me here: Create value. Hugh MacLeod reminds us that “the market for something to believe in is infinite”. The opportunity to build and sustain engagement across organizations, brands and markets, is also infinite. The idea of peddling a commodity product with a “one size fits none” technology (see my earlier post on “The Procrustean Approach to Employee Engagement”), based on a self-serving vision of corporate enrichment is a lot like selling branded mud in a rainforest. Don’t sell branded mud in a rainforest.
Image may be NSFW.
Clik here to view.
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