An Open Letter to Convio

Feb 11: Got a really classy call from Convio CEO Gene Austin. They totally get it. Very impressive, very classy. – m

Dear Convio,

The news reports say you are preparing to go public. Congratulations.

Before that day arrives, I urge you to consider what happened when Kintera went public. They serve as a cautionary tale.

The day you go public you will be locked in a permanent, intense conflict of interest between your stockholders and your customers. At Kintera, that conflict was easily resolved: the customers got screwed.

[Note to Blackbaud: This is all water over the dam. I am sure by now you have turned Sphere into a miracle of CRM juicy goodness. During my quasi-involuntary Kintera years, Sphere was, in the inimitable words of a then-colleague, neither smooth nor round.]

The buzz in our biz is that you have made enormous strides over the years in the areas that count – client service, product usability, and bringing the promises of the salesforce and the realities of customerhood into an acceptable equlibirium. Vinay continues to be a major thought leader in fundraising, and an inspiring colleague. You’ve turned some of the hardest-to-please folks I know in the space into some of your most passionate supporters. That’s all good. Really good.

But here’s what’s gonna happen the day after the IPO. Your new “customer base” will be Wall Street. The shareholders won’t give a tinker’s damn about customer service. Your most senior people will be preoccupied with Sarbanes-Oxley and other bizarre and twisty bureaucratic nightmares that come with being public. (Someone remind me what S-O was supposed to be for. At Kintera it just distracted the top people from attending to the business.)

Kintera also went on a non-stop shopping spree with their IPO coffers full, buying up little companies left and right (and paying in stock options which at the end of the day were worth only slightly more than Confederate dollars). Every acquisition brought in another cadre of men and women who were used to being the masters of their own domains – literally and figuratively. Again, the challenges of integration were confusing and overwhelming, and contributed to a sense of perpetual chaos at the top.

I should note at this point that I personally like Harry Gruber, who founded and led Kintera for most of its existence. He was a visionary, and worked with infectious passion and joy. I don’t think Kintera’s problems were inherent to Kintera – many of Kintera’s problems were situational. And you Convio are now headed into the same waters.

I get it, you need to do what you need to do. Your operations are built on borrowed money, and the lenders need to be paid back. All well and good. But please, please – take stock now of what it is that makes you the best choice in the space right now, and do everything you can to make sure that your true north continues to be offering an excellent product and great service to the thousands of organizations you serve who spend every waking minute trying to change the world.