RightNow Technologies - Case Solution

Advise Greg Gianforte, CEO of RightNow Technologies, on which option to go ahead with.

As strategic advisors to RightNow Technologies (“RightNow” or “the company”), our recommendation comprises outlining a criterion to assess the decision, comparing alternatives against these criteria, and ultimately proposing an alternative.

Decision Framework

After reviewing Greg’s background, experience, and case facts, we determine that the proposed alternative must lead to the creation of 2,000 jobs in Bozeman to achieve Greg’s personal goal, generate a sufficient risk-adjusted return for the company, employees, and VCs, and capitalize on the current market valuations for market-leading software companies.

Assessment of Alternatives

1) IPO: Given that RightNow Technologies already has adequate cash to fund operations, the primary benefits associated with an IPO are generating the visibility needed to expand market share and providing a sufficient return to VCs.

However, given a lack of historical evidence and recent market volatility, it is difficult at the moment to determine how the market will value RightNow.

Furthermore, the IPO process may distract management and shift focus away from customer service while simultaneously increasing costs (e.g., costs involved in complying with Sarbanes-Oxley, governance, and reporting).

2) Continue to Grow Organically: RightNow Technologies has demonstrated strong performance within a short time period.

However, especially in this industry, past performance is…