Rumors going around on blind (posted by bolt employees) that over the course of a few rounds of layoffs it will be 30-50% of the total workforce. A lot of the initial layoff are software engineers. Apparently they only have 12-18 months of runway, and need to effectively double that. Current revenue is 40M.
I guess this is the beginning of the tech washout. clings to large tech company job
Jesus, my startup is making about half that with a good sales pipeline for this year and we are 55 employees total. We might hire additional handful this year but that's it. How do you even onboard when you double your workforce every few months?
I worked at a startup and the CEO was obsessed with hiring at all cost. We, engineers, were all wondering what the hell these new hires were supposed to do. We did not need them.
Then they explained it to me. They needed to show growth through hiring in order to raise money.
I mean, I couldn’t even blame them, if that’s a criteria for VC to hand you a check, well you gotta do what you gotta do.
Needless to say this startup, eventually had to cut cost and end up firing most North America employees and replacing them with new hires in east Europe.
Yeah Bolt's numbers are just nonsense. We do 1/3 of what you do with a slightly less workforce than you, same hiring strategy.
There have to be tons of businesses like ours. No one cares about small business success though. I'd love to read more books and stories about "small" businesses making $5-40MM and how they go about their day and running the company. Would make for far better reading than all the vaporware and malinvestment in the VC space due to free money over the last 5-10 years.
I've seen companies with less revenue and a bigger workforce growing at that rate. They call it blitz-scaling, and I don't know if it's actually ever worked, where I saw it first hand it was basically just setting a pile of money on fire.
you don't onboard efficiently which makes your new hires inefficient so you have to hire even more to compensate to just get the increase you wanted. This is just one factor in the raise of inefficiencies during a fast company growth.
Wow that is very impressive in this climate may I ask what is the category of the business? I am guessing it is not in any of the fashionable current spaces (blockchain, retail logistics, fintech,…)
1) "Multiple rounds" is basically the worst possible way to do layoffs.
2) Based on their recent fundraise (and assuming that they had 0 dollars at that point), that's basically a burn rate of 25-30M/m. I'm not sure I can event comprehend what that company could be spending that much money on.
In my experience, layoffs almost always happen in waves. The first layoff is usually when nonperformers and people who are already on managers' hit lists (people who are hard to fire only for legal reasons) are jettisoned. Later rounds start eating into actually valuable employees. In the interim, many experienced people read between the lines and make for the exits, further depleting the ranks and leaving behind folks who can not or will not look for opportunities elsewhere.
Even a single round is bad because it will cause some of your most hire-able people to look and then likely leave. When a second round comes too close to the first then everybody starts looking hard and the people that stick around are the ones nobody else wants. It would be cheaper to just close the doors.
The way to do layoffs is simple. You get managers to stack rank the lot, then you get every single person with 30 or more reports under them in a room.
Then you do the whole layoff in one 5 hour meeting.
Last valuation of this company was $10+ billion. Absurd. [0]
I'm personally happy to see the correction coming where profits - or lack thereof, more likely around these parts - actually means something these days.
I heard they had 900 employees. It's just a checkout page that plugs into your payment processor. I don't get why they need so many people. Most complicated thing they are probably doing is tokenizing the credit card themselves so the card info is portable across merchants with different processor.
Wait what the fuck, I thought the whole thing was about the Uber competitor also called bolt. No wonder some of the comments don't really make sense, especially in terms of team size.
Similar. It's wild to realize when I was CEO of our startup, we had significantly less name recognition, dramatically less capital raised (by orders of magnitude), a much smaller team.
...and yet apparently significantly more revenue per employee than Bolt. Oh, and we were profitable, infinite runway, good growth, solid unit economics, LTVs we understood.
Everybody starts making zero (or negative) dollars.
I have no positive view of Bolt myself, but in a situation like this VCs are putting money on future prospects/growth potential, not the early revenue.
I shaved a bit off our AWS bill and my CFO at the time asked if it was worth my time. I asked him if he knew how you get a huge AWS bill with no idea how to fix? A little bit at a time.
People get lazy because things seem good and let questionable hires and other expenses slide by because why not, there's plenty of money.
very broad strokes: money is raised to be spent. each round gets you to the next, or you reach some measure of sustainability before the money runs out — layoffs like this should be expected, regardless of the amount raised, if there’s a shift in conditions that indicate raising again in 18 months isn’t going to be easy. You can burn any amount of money if you want to.
Large profitable tech companies don’t lay off staff when they see opportunities to grow. I know that three of the Big 5 tech companies (FAANG - Netflix + Microsoft) are throwing money and headcount at cloud just from the aggressive recruitment I’m seeing - I work for one of the big 3 in the consulting department and I’m constantly getting solicitations from the other two. Apple also is still hiring where it sees growth
Remember that debt fuelled stock buybacks were a huge reason for propping up stock prices for these companies as well.
Now that cheap debt is off the table, that buyback strategy will have diminishing impact as well, forcing companies to find other ways to keep stock up (such as cutting costs)
> There IS risk to the employee; they now have a real loan outstanding and 100% personal recourse, so if the common stock becomes less than exercise price, their personal assets are on the hook
I can't see why it should be illegal. People take on debt to buy assets all the time. But this is just so irresponsible and immoral; I really doubt the leadership is actually running a sustainable business; and I'm also starting to seriously doubt there was any credibility to the whole YC/Stripe boys club thing.
1. Ryan (was) the CEO, and can pressure employees to buy stock (or let them go because they aren't "committed" enough).
2. Ryan loses nothing if the company fails (his personal loss has probably already been covered since the first VC round), but each employee is left with a mountain of debt.
3. It's just bad advice. I know plenty of people who took out loans for stock; and I would never recommend it; it's incredibly risky especially if it can destroy you if it fails. If leadership plays so fast and loose with other people's money, you have to question how well they are doing their job.
Good advice I got from colleagues at a 2000 era company who took out loans to buy their options and cover the taxes when the stock was at $50/share and then watched it drop to <$1/share while they were in a lockout window. I worked with people who had 6 figure loans they owed on for worthless stock. Took years for the stock to recover.
> Therefore, we made sure to give every employee ample time to read about the pros and cons of this decision, including learning about all the risks in the business, and we gave every employee a $300 stipend to consult a financial advisor during the implementation process.
I understand making things illegal to protect people from being swindled because they don't know any better, but if you made decision even after consulting a financial advisor that's on you.
It was an option, not a requirement. There are pros/cons to doing it, but it was ultimately the employee’s decision. I’m sure the risks were well disclosed. The issue is >50% of employees don’t understand any of it, no matter how well explained and disclosed.
I did the same thing once; early exercising my options in a couple batches as I had the money to do so, and filing an 89b election. Ultimately I had to borrow some money on a personal loan in order to exercise the last of my options as the value was starting to ramp fast leading up to the IPO.
Conveniently the CEO has bailed the sinking ship and publishes daily tirades against the "establishment" that is victimizing Bolt specifically every day.
The founder pushing employees to take such a reckless financial decision while presumably their only insight into many key business metrics is the leaderships rosy portrayal of them is unethically irresponsible.
At this scale/valuation of the company, it's probably a bad idea but hard to know at the time.
My understanding of US tax laws and options is that this sort of behavior is what you want for early stage startups. You allow early exercise, restricted vesting with the upside of paying no income tax now, only LTCG on vesting (+liquidity event), and potentially QSBS tax exemption if you joined early enough and the startup does well.
You missed one important insight: the founder pushing employees to buy shares. That's a red flag on its own. If your options expire, that's less dilution, so there isn't really an incentive to get employees to exercise other than raising funds and the appearance of internal confidence.
Responsible leadership will give you numbers, but leave you to make your own choice. Anything else should make you worry.
> if the common stock becomes less than exercise price, their personal assets are on the hook
Can someone explain what that may mean for the >50% of employees at Bolt that bought into this program, now? I'm really struggling to grok what my quoted sentence entails...
This is insane to me. I work at a startup with a similar valuation and we bring in almost double that amount of revenue a week... and I think we're overvalued.
I never cease to be amazed at how people value companies based on revenue and not profit. Revenue without profit numbers tell you nothing about how well the company is doing.
This reminds me during the dot com crash, when employees exercised their options when the stock was sky high, so they had gigantic paper gains and big AMT bills. Then the stock crashed (like 99% and then some crash), so employees were not only left with near worthless stock, but they had huge tax bills with no money to pay them - and they were sometimes locked out of selling due to insider trading rules as the stock was crashing.
I had a smaller YC company pitch me something like this as an option for my stock comp - an RSA (restricted stock agreement, or "founder's stock"), where I put up all the cash up front, paid a big income tax bill in the first year, but then upside was all capital gains. I would technically own the stock but I had to sell it back for nothing if I left before it vested.
Turned out I left very early because the company wasn't doing great, in the current climate I think they're probably default-dead. All that cash is just gone.
See, generally speaking I don't think this is a bad deal.
I mean, I don't know the exact numbers / company profile. But I was in a similar situation 8 years ago. I could early exercise and I did. Estimating taxes was a pain (but a fun challenge too, lol). A couple of years ago they finally had a liquidity event and doing all these exercise shenanigans saved me a ton of money, so I'm glad I did that.
The business was doing well and I knew exactly what the risks were and I knew I could afford to lose that money. I joined early so it wasn't that much money to begin with.
I guess my point is that I wouldn't be too dismissive of early exercise / RSAs / etc — for the right kind of person / company it could be a great tool.
I always found corporate credit cards to be similarly dodgy. Firms I worked at offered a "corporate" amex. The employee as card holder was personally liable for the debt, the employer had no liability. At the time these cards did not accrue any points either. And the corporate policy was typically "no personal expenses".
1) you must use corporate card for company expenses
2) you must not use corporate card for personal expenses
3) you cannot accrue points for use of corporate card
4) you are personally liable for corporate expenses on this card
I'm pretty sure amex was giving big perks to CFOs.
If you assume a limit of $10k per card and company (like the one I was at) had over 10k employees (though not all had cards) the amount is pretty astonishing and zero liability.
I once had an issue with Amex because I'd been travelling a lot and the boss was away and then slow to approve.
Bolt Financial, the finops company, not Bolt the car sharing service which seems to be doing fine:
> In January 2022, Bolt raised €628 million from investors led by Sequoia Capital and Fidelity Management and Research Co, taking the company's valuation to €7.4 billion
This comment should be upvoted. I suspect many people in the thread, like myself, read the whole thing thinking it's about the ride-sharing company. That would be bolt.eu, not .com.
Small note on the Bolt that's doing fine, I suspect a big part of why they're doing fine is that they're doing a lot more than just car sharing. Last I checked, they offer car sharing (car rentals), taxi service (think Uber), food delivery, scooter rental, and I'm sure there's other things in their basket. In many markets their taxi drivers do food delivery during slow hours, cars are moved into the rental part of the business when the taxi business doesn't need as many of them etc. It's a surprisingly well run business for a startup, honestly.
I called it ages ago -- this company is an utter train wreck. I am honestly ashamed of the entire industry for birthing and fostering this basically fraudulent company. Its mistakes and lies are compounding on themselves, creating awful outcomes for its employees:
- Company almost certainly juiced its usage numbers, potentially by buying users to inflate its customers revenues, so it could use those numbers to convince new customers
- Used a single deal with a large company (Forever 21) to sell VCs on the vision, while under the hood that deal was clearly failing
- ex CEO picked twitter fights constantly, to the point of calling into question whether he was even capable of focusing on execution
- Biggest competitor (Fast) exploded even before the market crash.
- Offered employees a four day work week while claiming rapid exponential growth
- Offered employees PERSONALLY guaranteed loans to help them exercise the options
- Raised at $11B valuation with 100x forward revenue multiples.
- Cash raised is currently 6-8x revenue multiple, meaning valuation over next 12m makes employee options worthless
- I've never seen the technology used on any website, and I am a frequent online shopper.
Anecdotally, I keep a very tight list of domains that run with default third party blocked JS, and am very picky on uBlock. I have never seen a single site using Fast or Bolt.
I have an ecommerce web site for a smallish regional coffee company I own. I heard about Bolt and was interested enough to go to their web site to learn more. Could not find a pricing page. Saw a form where you can request a demo. Realized it was one of those products. Left immediately. I don't have time for that song and dance. No wonder they can't grow market share.
I was in the middle of an interview loop with Bolt mid-Apr, they canceled my onsite so they could (supposedly) prioritize onboarding people they'd already hired. Dodged a bullet there. Also did calls with Coinbase, Uber, and Twitter, who all now have hiring freezes.
Boggles my mind how companies flip on a dime between "hire as fast as possible" and "the sky is falling, we're laying people off." In the case of Bolt and Twitter, there were material changes (lawsuit from major customer, Elon Musk) but the others are just scared about the economy.
Conversely: "Slow to hire, fast to fire" is something I've heard a few times in my career, and usually within organizations that turned out to be truly toxic and absolutely burnout inducing places to work.
Operating on either extreme probably makes for captivating blog posts and "leadership reading material" but in praxis seems like it should be self-evidently a bad idea.
With YC, Craft, and Sequoia all urging their portfolio companies to operate at a < 2x burn multiple, it would make sense to see these growth stage companies start to panic.
When you’re small, and have revenue, it might only take a handful of layoffs to get to “default alive” as a startup. But once you go beyond a series A and start dumping gasoline on every part of your business to scale faster, the risk starts to grow exponentially. These companies with hundreds of employees are insanely inefficient, but that’s the game. You run hot until you get above everyone else and then you start to figure out how to actually make money.
During a recession that type of growth probably doesn’t work. We might still see a few companies blitz scale, but if the capital is risk off there’s unlikely to an abundance of these types of companies.
In a way it’ll be an end of an era. Probably for the better, but the run was great while it lasted (depending on how you view great). I think any startup caught in the middle right now needs to effectively assume they’re dead unless they get to operational break even with their current runway.
Couldn't agree more! Being at now-puplic start-up that needs somewhere north of, IMHO, 500 million to become somewhat profitable (industry specific, some hardware products simply cost a shit ton of money to develop) that is something I think a lot about lately.
Especially the, up until now, habbit of inefficiently thtowing money and people at a problem hoping something sticks. In hardware, so nothing that can be growth-hacked.
> habbit of inefficiently thtowing money and people at a problem
I've repeatedly commented on this phenomenon. In my experience this has never worked and unlikely to work. I've seen at least 2-3 startups doing well go completely offtrack by sudden infusion of big VC money. They are then expected to ship features like no tomorrow which leads to rampant hiring. As a result salaries go through the roof messing up internal compensation parity. Also, money attracts a certain persona of people who are good at building empires and not creating value.
I guess what I'm trying to say is; a big infusion of VC money is rarely a good thing for an org. They stop being efficient and innovative orgs. When money is abundant the first response to any challenge is to throw money at it. Is website not able to handle traffic? Throw bigger DB, more machines. Not able to ship a feature on time? Hire a dozen more. Is user sign up down? Run a cash back campaign. This may help them crush a competitor in the short run but by the the music stops and money dries up once efficiency driven org would have lost that DNA.
I don’t think it will, but even a 1-2 year recession is enough to destroy these companies. The leverage in / structure of the current financial system makes it extremely hard to not decrease interest rates again.
> This is one of the hardest messages I’ve ever had to send.
Layoffs are something of a fact of life but, seriously, executives need to stop saying things like this when they announce them. Nobody gives a damn how company leaders feel in these situations, least of all the people receiving the message - nor should they.
I remember reading a blog post about how to do lay offs once. I can’t find it anymore but it was essentially don’t make it about yourself. It leaves a bitter taste in their mouth. Wish I could find it.
When I've had to separate with employees, I never brought feelings into it. I kept it fact-based as possible for a multitude of reasons. Most of all, respect for the employee.
In March 2020 when the pandemic lockdowns hit, my CEO literally cried as he told us on Zoom we had to furlough our friends and take a pay cut. He did not hide it in an email or call attention to how it made him feel. What he did do was bust his ass to bring back every one of those employees a few months later. The actions of truly caring people are so much greater than the empty posturing of failing amateurs running toy businesses.
I mean in the modern capitalist society is having a CEO cry when they fire someone required? I’ve survived many layoffs but wouldn’t have been upset if my manager or leadership simply stated the facts.
I'd say that depends on the audience. If you were still working at Bolt, for instance, and the CEO did not indeed feel anything, you'd probably be a little spooked that they seem like a sociopath.
At the same time, it is such a copy-paste statement that it's unlikely to elicit much confidence in its veracity, but still, the absence of it would not be taken well I'd imagine.
It depends imho on the severance terms. If the company has decent ones then the message is "this hurts me and I did everything to cushion the blow for you" If the company has bad ones then the message is "let's make a hundred people losing their livelihoods about how a multimillionaire feels but isn't willing to give up any of those millions."
Thanks to him, lot of people in the industry are now a bit wiser and more careful while others simp for the establishment because they seek to benefit, are benefiting (maybe in the minds of some, they think they are reading this board and looking at profiles of users who simp or attack them?)
When he outed YC, Sequoia Capital and New York Times, I felt uneasy because I knew there would be blowbacks.
He claimed Stripe copied his blog post, but when you click the links you'll see that Stripe's post was submitted earlier than his! This was his big "WHO WANTS PROOF?" reveal. He does not walk away from this looking good.
I was on that thread, I have no idea what Bolt did at the time and I don't use Stripe.
Ryan didn't even look at the timestamps for the posts he was referencing: https://news.ycombinator.com/item?id=30069359 Everything else he said was pure speculation and story-telling.
Anecdotally, most people on HN hate the NYT; it should give you pause if even these people did not buy Ryan's story-telling.
There is a more tactful way to do what he did. It's ok to criticize business competitors, but calling them "mob bosses" and going on paranoid rants about them is not effective. It probably doesn't matter that much for him because he has fuck you money, but I hope he learned to have more self control after this.
Readit News
I guess this is the beginning of the tech washout. clings to large tech company job
EDIT: 33% layoff today
Jesus, my startup is making about half that with a good sales pipeline for this year and we are 55 employees total. We might hire additional handful this year but that's it. How do you even onboard when you double your workforce every few months?
Then they explained it to me. They needed to show growth through hiring in order to raise money.
I mean, I couldn’t even blame them, if that’s a criteria for VC to hand you a check, well you gotta do what you gotta do.
Needless to say this startup, eventually had to cut cost and end up firing most North America employees and replacing them with new hires in east Europe.
There have to be tons of businesses like ours. No one cares about small business success though. I'd love to read more books and stories about "small" businesses making $5-40MM and how they go about their day and running the company. Would make for far better reading than all the vaporware and malinvestment in the VC space due to free money over the last 5-10 years.
What company is that?
2) Based on their recent fundraise (and assuming that they had 0 dollars at that point), that's basically a burn rate of 25-30M/m. I'm not sure I can event comprehend what that company could be spending that much money on.
The way to do layoffs is simple. You get managers to stack rank the lot, then you get every single person with 30 or more reports under them in a room.
Then you do the whole layoff in one 5 hour meeting.
Swing the axe and get it done in 2 days.
Last valuation of this company was $10+ billion. Absurd. [0]
I'm personally happy to see the correction coming where profits - or lack thereof, more likely around these parts - actually means something these days.
[0]: https://techcrunch.com/2022/01/14/online-checkout-bolt-decac...
...and yet apparently significantly more revenue per employee than Bolt. Oh, and we were profitable, infinite runway, good growth, solid unit economics, LTVs we understood.
Imagine!
I have no positive view of Bolt myself, but in a situation like this VCs are putting money on future prospects/growth potential, not the early revenue.
(Doesn't work if the company goes bust though)
https://www.crunchbase.com/organization/bolt-5/company_finan...
how can a company burn money that quickly so they end up with only 12-18 months of runway?
People get lazy because things seem good and let questionable hires and other expenses slide by because why not, there's plenty of money.
Facebook? Who knows? I don’t follow adTech
Now that cheap debt is off the table, that buyback strategy will have diminishing impact as well, forcing companies to find other ways to keep stock up (such as cutting costs)
It will be 12-18 months at least before we can tell if a long legged tech washout is upon us.
Dead Comment
https://twitter.com/theryanking/status/1493390184897032201
HOLY CRAP. How is this even legal???
1. Ryan (was) the CEO, and can pressure employees to buy stock (or let them go because they aren't "committed" enough).
2. Ryan loses nothing if the company fails (his personal loss has probably already been covered since the first VC round), but each employee is left with a mountain of debt.
3. It's just bad advice. I know plenty of people who took out loans for stock; and I would never recommend it; it's incredibly risky especially if it can destroy you if it fails. If leadership plays so fast and loose with other people's money, you have to question how well they are doing their job.
Good advice I got from colleagues at a 2000 era company who took out loans to buy their options and cover the taxes when the stock was at $50/share and then watched it drop to <$1/share while they were in a lockout window. I worked with people who had 6 figure loans they owed on for worthless stock. Took years for the stock to recover.
You missed the tweet directly under it:
> Therefore, we made sure to give every employee ample time to read about the pros and cons of this decision, including learning about all the risks in the business, and we gave every employee a $300 stipend to consult a financial advisor during the implementation process.
I understand making things illegal to protect people from being swindled because they don't know any better, but if you made decision even after consulting a financial advisor that's on you.
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Conveniently the CEO has bailed the sinking ship and publishes daily tirades against the "establishment" that is victimizing Bolt specifically every day.
Responsible leadership will give you numbers, but leave you to make your own choice. Anything else should make you worry.
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Source: https://twitter.com/theryanking/status/1493609864534315014
> if the common stock becomes less than exercise price, their personal assets are on the hook
Can someone explain what that may mean for the >50% of employees at Bolt that bought into this program, now? I'm really struggling to grok what my quoted sentence entails...
edit: thanks much for the quick explanations
This is insane to me. I work at a startup with a similar valuation and we bring in almost double that amount of revenue a week... and I think we're overvalued.
> At Bolt, we did it as a Series D company
> If your company has a strong growth trajectory, the benefits to your team from this program can be extraordinary.
https://mobile.twitter.com/theryanking/status/14933901919518...
This reminds me during the dot com crash, when employees exercised their options when the stock was sky high, so they had gigantic paper gains and big AMT bills. Then the stock crashed (like 99% and then some crash), so employees were not only left with near worthless stock, but they had huge tax bills with no money to pay them - and they were sometimes locked out of selling due to insider trading rules as the stock was crashing.
Turned out I left very early because the company wasn't doing great, in the current climate I think they're probably default-dead. All that cash is just gone.
I mean, I don't know the exact numbers / company profile. But I was in a similar situation 8 years ago. I could early exercise and I did. Estimating taxes was a pain (but a fun challenge too, lol). A couple of years ago they finally had a liquidity event and doing all these exercise shenanigans saved me a ton of money, so I'm glad I did that.
The business was doing well and I knew exactly what the risks were and I knew I could afford to lose that money. I joined early so it wasn't that much money to begin with.
I guess my point is that I wouldn't be too dismissive of early exercise / RSAs / etc — for the right kind of person / company it could be a great tool.
1) you must use corporate card for company expenses 2) you must not use corporate card for personal expenses 3) you cannot accrue points for use of corporate card 4) you are personally liable for corporate expenses on this card
I'm pretty sure amex was giving big perks to CFOs.
If you assume a limit of $10k per card and company (like the one I was at) had over 10k employees (though not all had cards) the amount is pretty astonishing and zero liability.
I once had an issue with Amex because I'd been travelling a lot and the boss was away and then slow to approve.
Do we have evidence to this encouragement?
There is basically no way to read that thread where it doesn't sound like an encouragement.
I presume the Twitter braggery counts as encouragement.
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> In January 2022, Bolt raised €628 million from investors led by Sequoia Capital and Fidelity Management and Research Co, taking the company's valuation to €7.4 billion
- Company almost certainly juiced its usage numbers, potentially by buying users to inflate its customers revenues, so it could use those numbers to convince new customers
- Used a single deal with a large company (Forever 21) to sell VCs on the vision, while under the hood that deal was clearly failing
- ex CEO picked twitter fights constantly, to the point of calling into question whether he was even capable of focusing on execution
- Biggest competitor (Fast) exploded even before the market crash.
- Offered employees a four day work week while claiming rapid exponential growth
- Offered employees PERSONALLY guaranteed loans to help them exercise the options
- Raised at $11B valuation with 100x forward revenue multiples.
- Cash raised is currently 6-8x revenue multiple, meaning valuation over next 12m makes employee options worthless
- I've never seen the technology used on any website, and I am a frequent online shopper.
Real talk, is this fin-tech's latest Theranos?
I went down this rabbit hole last month. While not directly related to the current topic, it might help explain why you've "never seen it": https://twitter.com/nrmitchi/status/1519174682863226880
A product not intended for an SMB, but instead one targeted at large enterprises?
Bolt definitely has some explaining todo with employee stock options but calling it Theranos seems little extreme.
Fast didn't inflate their revenue.
Bolt encouraged employees to take the loan to exercise stock. And Bolt's founder founded that loan company.
Fast definitely didn't do that
Calling it theranos seems fair...
Bolt : WeWork :: Fast : Theranos
Here are some good reads: https://www.nytimes.com/2022/05/10/business/bolt-start-up-ry...
and ICYMI the infamous "Stripe and YCombinator, the Mob Bosses of Silicon Valley" thread from the soon-to-be-former CEO:
https://twitter.com/theryanking/status/1485784823641755648
if it looks like a duck, walks like a duck, quacks like a duck...
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Boggles my mind how companies flip on a dime between "hire as fast as possible" and "the sky is falling, we're laying people off." In the case of Bolt and Twitter, there were material changes (lawsuit from major customer, Elon Musk) but the others are just scared about the economy.
Operating on either extreme probably makes for captivating blog posts and "leadership reading material" but in praxis seems like it should be self-evidently a bad idea.
When you’re small, and have revenue, it might only take a handful of layoffs to get to “default alive” as a startup. But once you go beyond a series A and start dumping gasoline on every part of your business to scale faster, the risk starts to grow exponentially. These companies with hundreds of employees are insanely inefficient, but that’s the game. You run hot until you get above everyone else and then you start to figure out how to actually make money.
During a recession that type of growth probably doesn’t work. We might still see a few companies blitz scale, but if the capital is risk off there’s unlikely to an abundance of these types of companies.
In a way it’ll be an end of an era. Probably for the better, but the run was great while it lasted (depending on how you view great). I think any startup caught in the middle right now needs to effectively assume they’re dead unless they get to operational break even with their current runway.
Especially the, up until now, habbit of inefficiently thtowing money and people at a problem hoping something sticks. In hardware, so nothing that can be growth-hacked.
I've repeatedly commented on this phenomenon. In my experience this has never worked and unlikely to work. I've seen at least 2-3 startups doing well go completely offtrack by sudden infusion of big VC money. They are then expected to ship features like no tomorrow which leads to rampant hiring. As a result salaries go through the roof messing up internal compensation parity. Also, money attracts a certain persona of people who are good at building empires and not creating value.
I guess what I'm trying to say is; a big infusion of VC money is rarely a good thing for an org. They stop being efficient and innovative orgs. When money is abundant the first response to any challenge is to throw money at it. Is website not able to handle traffic? Throw bigger DB, more machines. Not able to ship a feature on time? Hire a dozen more. Is user sign up down? Run a cash back campaign. This may help them crush a competitor in the short run but by the the music stops and money dries up once efficiency driven org would have lost that DNA.
Maybe it’s just me. But I don’t consider publicly traded companies to be anywhere near a startup.
I don’t think it will, but even a 1-2 year recession is enough to destroy these companies. The leverage in / structure of the current financial system makes it extremely hard to not decrease interest rates again.
I guess net burn = net loss?
Layoffs are something of a fact of life but, seriously, executives need to stop saying things like this when they announce them. Nobody gives a damn how company leaders feel in these situations, least of all the people receiving the message - nor should they.
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At the same time, it is such a copy-paste statement that it's unlikely to elicit much confidence in its veracity, but still, the absence of it would not be taken well I'd imagine.
When he outed YC, Sequoia Capital and New York Times, I felt uneasy because I knew there would be blowbacks.
Edit: added "some of"
He claimed Stripe copied his blog post, but when you click the links you'll see that Stripe's post was submitted earlier than his! This was his big "WHO WANTS PROOF?" reveal. He does not walk away from this looking good.
Ryan didn't even look at the timestamps for the posts he was referencing: https://news.ycombinator.com/item?id=30069359 Everything else he said was pure speculation and story-telling.
Anecdotally, most people on HN hate the NYT; it should give you pause if even these people did not buy Ryan's story-telling.