Domo, a Utah-based analytics startup, saw its shares pop 30% in its long-awaited IPO on Thursday.
It’s a welcome bit of relief for a company that has been under scrutiny because of its troubled financials: Domo’s IPO prospectus revealed that the company had a mere $72 million in the bank, exhausted its lines of credit, and run up a deficit of $803.3 million. Worse, the prospectus warned that if Domo didn’t raise more capital by August, it could face a restructuring.
Even with the stock’s pop on Friday, Domo’s market capitalization of about $681 million is well below its $2.2 billion private market valuation, reflecting Wall Street’s wariness of the company.
But finances aside, there may be another reason for Domo investors to be concerned, as insiders tell us that some women at the company have expressed unease with Domo’s corporate culture and with the way women are treated in the workplace.
Several insiders connected to the company that Business Insider spoke to pointed the finger at CEO Josh James, who has majority control over the company, for creating an environment that they say makes Domo an undesirable place for women to work. Those insiders, who asked not to be named discussing internal company matters, related several incidents that they said left some employees feeling alienated in an organization where the executive ranks are predominantly white males.
A Domo spokesperson told Business Insider that James is very committed to workplace diversity. “Anyone who knows Josh knows he cares deeply about creating a workplace where the best talent – regardless of their gender, race, religion, sexual orientation, age, or any other factor, feels welcome,” the spokesperson said. “The implication that a story could portray Josh as insensitive to diversity is not only offensive, but also so off the mark.”
James could not immediately be reached for comment.
A shopping story that didn’t go over well
Several sources cited an all-hands meeting at the end of 2017 when James was discussing the ParityPledge, a program asking CEOs to pledge to interview at least one woman for any open role at the VP level or higher.
As part of the discussion, Domo insiders say, James told a story about a trip to Jacksonville, Florida, with his family. We’re told that James, who is white, said he and his family were shopping at a Nordstrom department store when he suddenly became aware that they were the only shoppers who weren’t black.
The experience, James allegedly told his staff, taught him what’s it’s like to be an outsider — and our sources say that he then likened it to the disorientation that a woman might feel on a management team comprised mainly of men.
While employees generally seemed to believe that James meant well in making his original comments, numerous employees felt the comments were dismissive of women and people of color, and gave the impression that the company was out of touch on important diversity issues.
“In the meeting, Josh was giving background on experiences he had in his life — like being in a store outside of Utah, a state that is pretty homogeneous, where he was the minority. It was one of those moments that, as a business leader, made him pay attention to the topic of diversity in the workplace,” the Domo spokesperson said. The company also points to blog entries that James has written on the importance of inclusion, and the ParityPledge in particular.
Still, James’ presentation resulted in a flurry of complaints within the company and James ultimately apologized at a second all-hands meeting, the company confirms.
“Josh did indeed call a second meeting right after realizing his good intentions were misinterpreted. It was important enough for him to apologize for not communicating well, and doing what he could to make sure his intentions were understood,” says a Domo spokesperson.
The Mykonos party test
James is also said to have told employees that he builds relationships with people he would feel comfortable bringing with him to party on Mykonos, the Greek island. He then noted that his wife would feel uncomfortable if he brought a woman on such a trip, making it more difficult for him to build relationships with female executives, we’re told.
The comments appear to have been part of an honest discussion of institutional bias, specifically at Domo and more broadly, in the industry, but some employees were nonetheless disturbed.
Indeed, Business Insider has heard from several people close to the company that James has a habit of keeping his friends close. And the Domo executive team is predominantly white and male.
And some employees feel that it’s hard to advance at Domo without meeting that profile, we’re told. That said, the management team is not entirely male: Catherine Wong serves as Domo Executive VP of Product, making her a direct report to James.
The Domo spokesperson said that James’ Mykonos story had been misunderstood. “The point he was trying to make with the stories he told was that people tend to recruit who they know. If you don’t typically socialize with women, you don’t have a good network of women you can tap into. Trust is built when you have an established relationship with someone,” the spokesperson said.
Separately, Business Insider has learned that Domo Chief Operating Officer Matt Belkin departed the company shortly before the company filed to go public. He had been with the company since 2014, making the timing of his departure unusual.
James is well-known in the tech industry for founding Omniture, a data analytics startup which was sold to Adobe for $1.8 billion in 2009. Domo, founded in 2010, came out of stealth mode in 2015 with a $1 billion valuation and a lot of hype.
In 2016, Domo insiders told Business Insider that James was a charismatic leader who is nonetheless prone to exaggeration, with a history of at times, overpromising and underdelivering. People close to the company tell us that this is still the case, with James an expert at motivating employees and marketing, but less reliable when it comes to results.
Now that Domo has begun trading on the public markets, under the ticker symbol “DOMO,” we’ll get to see if James’ next act is as successful as his last.
Are you a Domo insider with interesting stories to share? Contact me at mweinberger@businessinsider.com.
Leave a Reply
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
