Twitter (TWTR) has had some interesting mea culpas of late. On Wednesday, newly reinstalled CEO Jack Dorsey apologized to developers at the company's annual conference for the "complicated, confusing and unpredictable" relationship it had with them. This is after years of first encouraging and then discouraging small software companies from creating services that build on Twitter's offerings.
A day later, Dorsey was involved in another make-good. Shortly after taking office at Twitter, he laid off 8 percent of the company's workforce (some of whom found out only when they could no longer get into their corporate email accounts). But then Dorsey gave a third of his Twitter shares, worth some $200 million, to a stock pool for employee compensation.
Don't worry about Dorsey: He'll also gain considerable wealth as Square, the other company where he's CEO, goes public soon. But the need to make amends suggests that even one-time darlings of tech have found that high valuations aren't enough to keep the world happy.
Success enables many things, including the put-up-with-it behavior that has long been visible in the industry. That's particularly true among many of the so-called unicorns, or startups that reached billion dollar valuations, often without profit (or revenues) that came close to justifying them. (Fortune's running tally currently has 138 unicorns.)
Here are some of the behaviors from a variety of companies that have irked people along the way:
- Displacement of long-time residents, businesses and communities in some cities by outbidding for land and facilities.
- Extravagant compensation and benefits for employees.
- Legal mechanisms that vastly reduce the corporate taxes they paid.
- A lack of diversity in hiring, promotion and management.
- Perceived dodging of regulatory requirements that others have to follow.
But increasing news out of the tech world suggests that many of the high-fliers have feet of exotic designer clay. Evernote cut 13 percent of its staff at the end of September and planned to close a number of offices, while Groupon, LivingSocial, Flipagram and Zomato are all reportedly cutting staff. Gilt Groupe closed on an additional $50 million investment early in 2015 because, after years, the company still wasn't close to an IPO. Jessica Alba's Honest Company has come under fire about its sunscreen product quality. And then there are the reports of efficacy problems with blood-testing company Theranos.
Of course, plenty of tech companies aren't getting into public trouble, but the growing number of stories about those that are suggest that young businesses can no longer act with impunity. These problems need to be addressed and solved, because neither investors nor consumers have unending patience.