Shareholder Value

Fucking brilliant:

…trying to maximize shareholder value is ridiculous. I couldn’t run a company where you had to use that as an excuse for why it was doing things.

This says so many things about entrepreneurship to me. It’s at the heart of why I love small companies. People working towards a specific mission are energetic and approach work like a they’re on a crusade. People working towards increasing shareholder value don’t really give a shit (unless you’re paying them really big bonuses, which creates its own problems).

Credit for that quote goes to Rob Kalin. (Almost) equal credit goes to Fred Wilson for his response:

The shares our firm bought in Etsy back in 2006 have gone up in value more than 10x based on the last stock purchased in the company (last summer). One of the things I’ve learned over the years by working with special people like Rob is that you can create shareholder value as “exhaust” by focusing on an alternative mission, one that is closer to real problems faced by real people.

Shareholder value is a byproduct of running a successful company, not a primary objective.

I wish MBA programs taught this.