In recent years, there's been a stampede of unicorns in Silicon Valley: More than 275 private companies are valued at $1 billion or more, according to a Crunchbase leaderboard I found the other day. The flip side of this stampede is a drought of IPOs: Today we have just half of the number of public companies we did in 1997.
The shrinking public market is bad for innovation and investors. Regardless of the funding private investors can offer to fuel research and development, the open market can always offer more.
It's also bad for job creation. Companies create 86 percent of their job growth after they go public; I learned this stat from Adena Friedman, CEO of NASDAQ, when I interviewed her for my Office Hours podcast.
It's also bad for society. Over-reliance on private funding creates a cycle of wealth among those who already have it, with little opportunity for pension funds and individual participants to invest in the Amazon, Apple or Google of tomorrow. Public markets are good for the public.
Finally, it's bad for investor transparency. Read Bad Blood, the fascinating and searing indictment of Theranos, to get a glimpse into what happens when investor transparency is thrown out the window.
NASDAQ and others recognize the need to make going public fashionable again -- both for the unicorns and other great companies in the making (if you're reading this, you may be building one of them right now). Their campaign, Revitalize, is a formal attempt to remove the barriers companies perceive to going public.
While industry bodies focus on regulatory measures, lobbying and thought leadership to combat these perceptions and woo new entrants, I'll speak from the trenches as CEO of a public company: It's good for your business.
The transparency of being public introduces a diligence and discipline executing to your strategic priorities that no board -- no matter how awesomely ranked in title or experience - can compete with. It also gives you a bigger stage to share what you're great at; for example, companies like Netflix and Zillow Group use earnings calls to display company culture.
Should you decide to take your company public, here's some advice from my experience:
Embrace regular scrutiny. It's a blessing in disguise.
Prioritization is hard when you have so many things you want to invest in as a business. Thanks to a seemingly endless cash flow with limited accountability, more than a few Silicon Valley unicorns have been able to invest in all sorts of things with a lack of discipline, resulting in financial skeletons in the closet that wouldn't be tolerated at public companies.
By communicating your strategic priorities to investors, you're effectively giving your business guard rails for decision-making and holding yourself accountable -- constantly -- to those providing the funding. Many of our top shareholders have been valuable partners in growing Zillow Group over the last few years, and I honestly enjoy speaking with them about our strategy and our results. Their input is invaluable.
Prioritize your culture. Investors care about it.
Even before Uber's culture scandals and Emily Chang's book, "Brotopia," investors cared about company culture. That's because culture underpins business models, and culture can undermine even the most transformative ideas if it's not nurtured properly. Attracting, motivating and retaining great people is one of our four strategic priorities.
On a recent investor visit I was pleasantly surprised by how many questions they asked about our culture, and I was grateful and proud that I could say good things. Make sure you put yourself in a position to have the same advantage.
Focus on the long term. Make sure your employees do, too.
I often quote Amazon CEO Jeff Bezos when talking about the long term: He said innovators need to be "willing to be misunderstood" for long periods of time. That can be tough as a public company, because every day your stock moves, and investors, shareholders, employees and prospects are watching it. Try not to focus on it. My team doesn't manage to quarterly results but to priorities, and we also message to employees that the stock price will take care of itself if we focus on the mission.
Politely decline the confetti. You will regret it.
When you go public, ringing the bell is a rite of passage and a historic moment as a company. But approach it with caution: When something bad happens to you (and it inevitably will), the first picture journalists will go for is your smiling team in front of the NASDAQ podium. If you have confetti in your picture, it just rubs salt into the wound. Ring the bell with pride - but also with humility and foresight.
Being publicly traded is not always easy. But in my experience, it makes your company more effective, efficient, disciplined and communicative. Come on in, the water's warm.