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The elimination of free soda has nothing to do with frugality in the face of financial distress. Quite the opposite, the article begins telling the story of how

The elimination of free soda has nothing to do with frugality in the face of financial distress. Quite the opposite, the article begins telling the story of how well they were doing (considering current economic downturn). The whole point of the article is that this cost reduction measure is really a political declaration of the new CFO. The engineers probably heard this message as... "You filthy lazy monkeys, leave the soda and go back to your TV-typewriters". The article position is that this bold declaration is bad business practice and that the new CFO should have shut up and implement more subtle and relevant changes, leaving the engineers to slowly realize for themselves that "things aint what used to be no more". Said that, I agree that startup culture is riden with excesses. It is a whole live hard, die hard philosofy of compressing a decade of work into 2 or 3 years in exchange for big exit, screw life balance and all that. My opinion is that this is not a healthy way to live, but if you are into it you better get sure you are getting extraordinary compensation for your extraordinary effort. Working 80+ hrs per week for an average salary makes no sense at all.

qjz 17y ago
The author didn't convince me that the company was successful or that the CFO's move was political, and even provides information that suggests the opposite (the company wasn't making a profit and the CFO needed to address critical areas that had been overlooked). Your last paragraph is particularly relevant. Startups attract engineers who want to work in areas that interest them and in workplaces that are fun. But eventually someone has to do the work they didn't want to do, and the change in the environment seems unavoidable. Anyone attracted to startups would do well to heed your advice.
- crpatino 17y ago
  Let me quote from the article here... "Given all that could go wrong in this economy, they were doing well. Their business had just crossed cash flow breakeven, had grown past 50 employees, just raised a substantive follow-on round of financing and had recently hired a Chief Financial Officer. It was an impressive performance." The relevant pieces of information here are: 1. (Marginally) Cash flow positive: Even though the company may still be underwater, they are not adding to debt anymore. For a young company this is a nice place to be. Nobody expects you to be generating lots of money, but you are moving in the right direction and there is no immediate need to cut cost in order to survive. 2. Grown past 50 employees. Again, this mean they are in the right track. The fact that they are adding headcount means they are not stagnating, but growing. Besides, if they are cash flow positive, it is sustainable growth, not the crazy pump and dump trick of the dot com era. 3. Just raised a substantive follow-on round. This means they were not in immediate financial distress. They have a healthy operation and investors give them more money to keep making the right strategic decisions. No need to go cannibal here. The political declaration stuff is my personal interpretation of the incident. It says nowhere that the CFO implied or suggested that they should put those techies on their place. It is my personal belief that some key people may have feel that way, and that it was a blunder to risking that mis-communication to happen in the first place. Organizational culture is a delicate thing to mess with. And if you analyze the profile of people in the startup community (risk tolerant, idealism, and yes... hubris), it is a no-brainer that your local ubergeek is not going to take it like the average cube drone would.

qjz 17y ago

The author didn't convince me that the company was successful or that the CFO's move was political, and even provides information that suggests the opposite (the company wasn't making a profit and the CFO needed to address critical areas that had been overlooked). Your last paragraph is particularly relevant. Startups attract engineers who want to work in areas that interest them and in workplaces that are fun. But eventually someone has to do the work they didn't want to do, and the change in the environment seems unavoidable. Anyone attracted to startups would do well to heed your advice.

crpatino 17y ago
Let me quote from the article here... "Given all that could go wrong in this economy, they were doing well. Their business had just crossed cash flow breakeven, had grown past 50 employees, just raised a substantive follow-on round of financing and had recently hired a Chief Financial Officer. It was an impressive performance." The relevant pieces of information here are: 1. (Marginally) Cash flow positive: Even though the company may still be underwater, they are not adding to debt anymore. For a young company this is a nice place to be. Nobody expects you to be generating lots of money, but you are moving in the right direction and there is no immediate need to cut cost in order to survive. 2. Grown past 50 employees. Again, this mean they are in the right track. The fact that they are adding headcount means they are not stagnating, but growing. Besides, if they are cash flow positive, it is sustainable growth, not the crazy pump and dump trick of the dot com era. 3. Just raised a substantive follow-on round. This means they were not in immediate financial distress. They have a healthy operation and investors give them more money to keep making the right strategic decisions. No need to go cannibal here. The political declaration stuff is my personal interpretation of the incident. It says nowhere that the CFO implied or suggested that they should put those techies on their place. It is my personal belief that some key people may have feel that way, and that it was a blunder to risking that mis-communication to happen in the first place. Organizational culture is a delicate thing to mess with. And if you analyze the profile of people in the startup community (risk tolerant, idealism, and yes... hubris), it is a no-brainer that your local ubergeek is not going to take it like the average cube drone would.