E40: The Carta Controversy, Cloudflare’s Viral Moment, and The Death of Growth at Any Cost
Jan 21, 2024
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The podcast discusses Carta's exit from the secondary market business and Cloudflare's viral layoff. They also explore the death of the growth at any cost mindset. Other topics include transparency in private markets, changing opinions in organizations, a controversial termination, evolving metrics, and book recommendations.
Conflicts between Carta's new business line and its core business revealed founders' opposition to trading shares in private markets.
Lack of transparency and trust in private company transactions highlights the need for a better system.
Viral moments on social media can have long-term career effects and caution should be exercised in sharing sensitive moments online.
Deep dives
Carta's Expansion into Private Markets and its Downfall
Carta, a capital management company, aimed to create a systematic approach to trading shares in privately held companies. However, a breach of firewall between its equity management software and stock brokerage side led to a fiasco and a viral Twitter post. The incident highlighted the conflict between Carta's new business line and its core business and revealed that many founders were not in favor of trading shares of their privately held companies in the private markets. While the business line was shut down, it created the potential for a new player to build a valuable business in the space.
The Need for Transparency and Liquidity in Private Markets
The podcast hosts discuss the lack of transparency and liquidity in private markets, particularly regarding equity compensation. They shared personal experiences of failed promises in equity ownership in companies that did not use platforms like Carta. They emphasized the need for a better system of record, transparency, and trust in private company transactions. While acknowledging regulatory burdens, they expressed a desire for increased liquidity and fairness for employees and investors.
The Impact of Social Media Virality on Careers
The podcast also delved into the repercussions of social media virality, specifically in relation to a viral video of a Cloudflare employee's response to a layoff. The hosts acknowledged the initial sympathy and support the employee received, but expressed concerns about the long-term effects on her career. They discussed the potential negative impact of such viral moments on future job prospects and advised caution when sharing sensitive or private moments online.
Dealing with External Factors and Internal Impact
The podcast discusses how external factors can impact the internal organization of a company. It explores the challenges faced by a CEO when external events cause disruptions and mayhem internally. The CEO is questioned about how to handle such situations, and the importance of being transparent and authentic in communication is emphasized. The episode also delves into the creation of factions within the company and the difficulty in turning them around once they exist. The importance of being approachable and human as a leader is highlighted.
Strategic Focus and Reducing Work for Teams
The podcast episode touches upon the importance of having a strategic focus and reducing the workload for teams. It suggests the need to prioritize profitable initiatives and evaluate their impact on the overall business. The example of a company called NCR in 1890 setting the first-ever quota-based system is mentioned, highlighting the relevance of territory-based analysis and goal setting. The episode also discusses the challenge of determining which tasks to prioritize and the need for organizations to operationalize decision-making processes. Strategies such as reducing emphasis on non-profitable initiatives and focusing on profitable ones are suggested.
Our hosts discuss viral moments from the past two weeks, including Carta’s exit of their secondary market business and Cloudflare’s layoff of an AE that went viral on TikTok and LinkedIn. The episode wraps up with a discussion sparked by one of Sam’s most recent LinkedIn posts on how Growth at Any Cost (GAAC) is dead.
