Sounding Off: IPOs might hamper the spirit of innovation

Each Friday, PhocusWire dissects and debates an industry trend or new development covered by PhocusWire that week .

Going public, whether it's through a traditional IPO or vehicle-of-the-moment in the form of a SPAC, often leads commentators to suggest that it stifles innovation.

Such punditry usually centers on a number of preconceived ideas: that a company will be so wrapped up in the quarterly reporting that it loses focuses; and the pressure to churn out solid performance for its financial backers that it detracts from investing in trying new things.

This is a fair simplistic analysis but it is not entirely without merit.

What may have made a company great, when it was able to throw money at research and development without public oversight, can be a somewhat trickier to quantify when it is forced to do those pesky shareholder roadshows every three months.

And, by virtue of going public, many brands get bigger. A lot bigger, in fact - meaning that the spirit of innovation in a young, smaller company gets gradually ground into corporate dust as the business grows.

This is a fate that has befallen many a travel brand over the years, post-IPO.

But for every company that it took its eye of the innovation ball, there are others that have figured out a way to remain relevant in the ongoing development of new ideas that have an impact on themselves and the wider industry.

Amadeus, for example, often talks up its R&D budget of "hundreds of million of euros" each year, as do the major online travel agencies such as Booking Holdings and Expedia Group, both of which place a large emphasis on test-and-learn protocols with regards to product development.

The balance between the formalities and culture of becoming a public company alongside fostering an ability to try new things is a difficult one.

But it should be a major part of how a company positions itself to its own employees and investors after the bells rings.