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This is an ideal outcome for a situation where the failure of one person to do their job resulted in 400 employees losing theirs. As CEO, it's your responsibil
by dpiers 11y ago
This is an ideal outcome for a situation where the failure of one person to do their job resulted in 400 employees losing theirs.
As CEO, it's your responsibility to understand your runway and know whether your business can afford to be operating in a month or two. If it can't, you need to reduce your burn. Depending on a last minute cash infusion to avoid telling your employees things are looking rough means you failed to do your job and run a sustainable company.
- einarvollset 11y agoThis is an incredibly naive view of how SV works. See e.g. http://techcrunch.com/2015/07/25/startups-and-the-big-lie/ http://techcrunch.com/2015/07/25/startups-and-the-big-lie/
- pbreit 11y agoNot as naive as yours is overly cynical.
- einarvollset 11y agoPerhaps, but experience does that ;)
- pbreit 11y agoWell, I've been around the SV block once or twice.
- dpiers 11y agoI have a rather enlightened view of how SV works. I was the primary engineer on Uber's promotion and referral system for most of last year and ended up transferring to the internal audit team. I have a knack for risk identification and management. There is a difference between a well-run company with manageable burn that must raise capital to continue growing, and a company where the realistic prospects of a capital infusion are slim and the financial situation is dire. I used to work in the game industry, and both studios I worked at ended up gradually laying people off and eventually shutting down. Layoffs are the expectation for a struggling company - sudden shutdown is a sign of poor executive leadership.
- einarvollset 11y agoHonestly no offense intended; however, even if you're the VP of risk management for Uber currently - a company with 9K employees having raised $6.9B - that in no way what so ever gives you any insight as to the usual way in which young (series A say) companies operate. None. Zero. Zilch.
- dpiers 11y agoI'm not arrogant enough to claim to be an expert, but I have had a decent number of experiences for someone my age. I grew up in a small family-owned sandwich shop (which failed in 06 after 20 years). I worked for multiple mid-sized game development studios before I moved to SF to work for a post-series A 13 person YC startup that I watched grow to 50 people. I spent some time at BitTorrent, which has had its share of financing and staffing fluctuations over the years. I've been a part of a number of companies as they've succeeded and failed, and I've learned the difference between doing so gracefully or incompetently.
- cl42 11y agoThank you for writing this. As a startup CEO with 12 employees, I have a daily reminder of how much cash is in the bank. It is absolutely unacceptable and ridiculous for a CEO to mismanage a company and then write a blog post saying "Oops, burn!"
- pbreit 11y agoAlso considering that "burn" is one of the very few things that is wholly within your control.
- themartorana 11y agoAt first I thought "this statement is madness!" Then I thought about our burn, what the spreadsheets look like, how we estimate runway, and so on, and I realize this is uninformed madness. If you believe this, then you understand that 400 people losing their jobs is the definition of the wholly controllable burn.
- pbreit 11y agoI'm not sure I follow.
- rokhayakebe 11y agoLet us wait until you have 400 employees.
- cl42 11y ago400 employees will mean I still have a spreadsheet that tracks my cashflows and ensures I run a regular town hall to inform employees where we are. At what point does one not have such a spreadsheet/dashboard/report? Heck, a 400 you should have a part-time or full-time CFO who manages much of that for you to avoid such situations.
- nedwin 11y ago
- doomspork 11y agoI often wonder/worry that these sort of "bailouts" and acquisitions reward founders for poor decision making.
- cvgraham 11y agoI am guessing the founder in this case is going not going to be rewarded at all. Sounds like the company had a lot of debt and the "acquisition" was an asset sale. This means that they startups.co bought the assets and left the original company with the liabilities (aka millions of dollars debt). The Zirtual company will likely have to go through a chapter 11 which will be painful. She might get a little bit of extra salary from consulting for the new company but I'm guessing that's it. Overall I am guessing this is a horrible experience for her.
- toomuchtodo 11y ago> Overall I am guessing this is a horrible experience for her. You either succeed or you learn.
- doomspork 11y agoThanks for the reply cvgraham!
- chermanowicz 11y agoI can't say I'm surprised. I watched her speak at a conference once and was alarmed at how incredibly ill-prepared she was to run a business