Ten years ago today, Salon.com, the website I helped found in 1995 along with a group of colleagues from the San Francisco Examiner under the leadership of David Talbot, went public. We raised $25 million in an IPO that, from the vantage of a decade later, looks mirage-like in its improbability.
Today, of course, a Web company with little to offer besides some (extremely good) original content could never raise $25 million from investors, right? Actually, it seems to happen again and again. Strangely, this is a road that others continue to charge down with, apparently, only a vague sense of the history or the pitfalls.
One of the things we were proudest of about Salon’s IPO was the open, Dutch-auction style approach taken by our lead investment bank, W.R. Hambrecht & Co. (Jim Surowiecki wrote about the approach in Slate.) Hambrecht’s idea was to make the entire IPO process more fair and transparent by allowing investors to participate in setting the opening price in public through a novel auction approach. Our choice of this model was later vindicated when another little Silicon Valley company named Google adopted it for its own IPO in 2004.
Other things about that era are, certainly, painful to contemplate from this distance. The idea of using the IPO proceeds to go on a hiring binge looks insane, in retrospect — even though it was “what everyone else was doing” and it was what the company had explicitly promised investors it was going to do with their money. Almost precisely one year after the IPO, Salon, having grown to roughly 140 employees, would begin the first of several rounds of layoffs that eventually returned the company to the rational size it has remained at, roughly, to this day. (Read Gary Kamiya’s piece on Salon history from the site’s tenth anniversary in 2005 for more on all this.)
As I’ve written, during the dotcom bubble I was a father of newborn twins, and I spent much of the era in a haze of caffeine and adrenaline. Meanwhile, the pace of decision-making at Salon at the time was crazy — we were one small precinct of an entire industrial outbreak of madness. One conclusion I’ve drawn from that experience for myself is: never rely on a vehicle that’s moving too fast to steer. (And no, to answer a question some will probably have, I never made a cent on the offering myself: insiders weren’t allowed to sell stock at first, and by the time we were allowed to, the price had already begun to plummet. Besides, I really did believe in the company’s future.)
Salon survived, against the predictions of a chorus of schadenfreude-driven critics, and found its place as the Web resumed its growth from the post-bust rubble. I left the company two years ago to work on Say Everything, but I’m proud of the project I conceived and developed in my final year there, Open Salon. Under Kerry Lauerman’s leadership it has emerged as a true community of writers and readers — in some ways, fulfilling the original concept of Salon that David Talbot articulated in 1995 even more fully than the old-school Salon site.
Every post I’m writing here at Wordyard these days is mirrored over at my Open Salon blog (as well as on Facebook and other services). Write once, publish everywhere, talk with people anywhere they want to engage with you: not a concept that would have made it into a 1999 IPO prospectus, but one that makes a lot of simple Web sense today.