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Hype and plunder: Domo a new low for self-indulgent IPOs
- iamben 8y agoIs there a GDPR friendly version of this? [sigh]
- toomuchtodo 8y agohttps://news.ycombinator.com/item?id=17237708 https://news.ycombinator.com/item?id=17237708
- ysr23 8y agojust seen this tool (outline) on another HN post - works well: https://www.outline.com/9eSGhG https://www.outline.com/9eSGhG (i can't think of anyway to write a post recommending something that doesn't look like a spam link!)
- Gys 8y agoFor the EU this might be a good general summary: https://seekingalpha.com/article/4179302-may-scariest-ipo-filing-ever-seen https://seekingalpha.com/article/4179302-may-scariest-ipo-fi...
- deleted 8y ago[deleted]
- at-fates-hands 8y agoI've been apart of two companies who did similar things DOMO is doing and neither ended well. Both had millions of VC money and the CEO burned through it all on executive boxes at several pro teams, remodeling an office that didn't need it, travel expenses, and paying himself exorbitantly. Because of their spending, both companies slashed their runway in half, and within months, both companies went under before being able to ship a viable product. I don't see a good outcome for this company.
- foobarbazetc 8y agoThe only difference here is they do have a product. And apparently it’s pretty good? But yeah this isn’t going to end well.
- deft 8y agoReading this whole article and it isn't until the end you find out what Domo even does. Can't believe they've built an 800million deficit this quickly. Besides the wasteful expenditures described in the article, where is the money going? This isn't like Uber where they have to spend to grow. They are a software-only company.
- randyzwitch 8y agoThey are a BI dashboard company with lots of data integration connectors. They've been burning money with ads declaring 'spreadsheets are dead' and silly Domopalooza[1] lifestyle events [1]https://www.domo.com/news/press/domopalooza-2016-to-feature-flo-rida-award-winning-musical-artist-as-entertainment-headliner https://www.domo.com/news/press/domopalooza-2016-to-feature-... [2] https://www.domo.com/news/press/kesha-joins-the-domopalooza-2017-entertainment-lineup https://www.domo.com/news/press/kesha-joins-the-domopalooza-... [3] https://globenewswire.com/news-release/2018/02/15/1349133/0/en/Domopalooza-2018-Announces-Pitbull-as-Entertainment-Headliner-at-After-Hours.html https://globenewswire.com/news-release/2018/02/15/1349133/0/...
- reaperducer 8y ago>silly Domopalooza[1] lifestyle events Reminds me of a particular west coast startup I was associated with that took its final round of funding and blew most of it on a massive out-of-town party. Flew in all of the A-list bankers and tech types it could find. The idea was to make the (failing) app look like a huge deal in the eyes of investors and get bought, thus fulfilling its exit strategy. It worked.
- tardo99 8y agoIs the identity of this startup a secret? Maybe someone with a throwaway account could post it? Super curious here...
- cookiecaper 8y agoFWIW I had a startup as a contract client that sounds like they did something similar. Spent hundreds of thousands throwing a "relaunch party" to pander to investors. I assume this strategy is not rare. Only difference is that it didn't work for them and they went under a few months later.
- thisisit 8y agoI first heard of Domo last year when we were trying to find a better alternative our BI system. And boy, we were in for a ride. The first warning sign was that their pitch was full of cool sounding words. They kept referring to the product as a "cloud based operating system", whatever that meant. When we asked them to demo, their presales consultant struggled to create anything other than a canned demo. Personally, I even find their site annoying: https://www.domo.com/ https://www.domo.com/
- sologoub 8y ago> When we asked them to demo, their presales consultant struggled to create anything other than a canned demo. The opposite experience is what sold me on Looker - super competent team and very clear in how “the magic works”. All logic and queries are right there to copy/paste into your own editor to fiddle with if you so choose, or use the built-in SQL runner. At the same time, non-tech users need not worry about such stuff.
- numbsafari 8y agoSame here... I just wish Looker had visualizations at least on par with ... Excel. They’ve been promising to remedy that for two years now, and now they are promising a move to HighCharts by end of year... but will they fix all the issues, or just slap on a new coat of paint? I can only wait and see for so long.
- sologoub 8y agoHaven’t ran into much as our needs are fairly basic right now. Biggest gripe for me is the lack of comparison period within the tiles that display numbers. For example you have 1k users doing X. Is that good or bad? Data in context is much more usable - if X is leaving and it’s a 50% drop from last week, that’s great news! Conversely, if X is feature use, you have 100m users and the change is 2% from last year, maybe it’s not so good.
- dgudkov 8y agoAt least? Excel has excellent, top-level visualizations. They might not look sexy, but for everyone who works in the area of data visualization it's obvious how much effort and thought have been put into designing Excel charts. Getting data visualization right is far far less trivial than it might seem.
- yazr 8y ago> $3,276 per flight hour [for a leased private jet] I am no expert. But this seems cheap to me ? Can you really cross the USA in a private jet for less than $20K ? Edit: i am assuming this is not a new fancy Drone ..
- fjsolwmv 8y agoPer web search, that's a normal price. The question is if that's a good use of investor funds for a low value xompany.
- randyzwitch 8y agoEspecially when the company has ties to the founder/CEO.
- HelloNurse 8y agoIt's a matter of utility, not low value. One hour of rental jet costs like 33 $100 airline tickets: even considering saved time, many people need to go to the same place at the same time, and it has to be a rather distant place (Utah <-> either coast?), to make a rental convenient.
- sbr464 8y agoIt depends, but smaller jets I’ve seen invoices for 12-20k several times.
- gadders 8y agoAmateurs. "Unfortunately, our website is currently unavailable in most European countries. We are engaged on the issue and committed to looking at options that support our full range of digital offerings to the EU market. We continue to identify technical compliance solutions that will provide all readers with our award-winning journalism."
- spraak 8y agoThere are a few alternative links in the comments here that are GDPR friendly
- gadders 8y agoOh yes, and I've used those. It just seems ridiculous that an organisation as big as the LA Times can't manage a develop a solution on time. It doesn't provide a great deal of faith in the quality of their technology department.
- cornholio 8y agoOr maybe it shows that the LA Times still tries to be, ya know, a paper for people in LA so they are happy to wait for a one click GDPR solution from upstream or whatever, and prioritize the technology investment for something else. It bit me too but it's their fundamental right.
- jmull 8y agoI take this as one of the two central themes of this article: "...points to a persistent flaw in Silicon Valley financing: the willingness to give start-up founders unassailable control of their companies, to the point that investors have no recourse if things go blooey." That's not a flaw, it's a fundamental part of how it is meant to work. The investors generally don't want to invest in companies run by a committee of investors... or else they would certainly do just that. Not to mention the larger investors could self-fund their own companies, if that's what they wanted to do, and retain all control. They are investing in the ideas, talent, and execution of the founders and other principal executives. It would be pointless to turn around and take control away from them. (I think the other main theme of this article is that Domo is a mess... which is probably true. I only know what I read in the article, but it seems they have real revenue? It would have to more than double to match their rate of spending, but that can happen if they really provide value. It's hard to have confidence, though, in a CEO who is funneling money out of the company to his family and himself. Just the willingness to put that kind of cloud over the company, is a red flag.)
- dpark 8y ago> That's not a flaw, it's a fundamental part of how it is meant to work. Is it? Up until recently this was not the typical result. Google did this and others have followed, but it’s not how it was done before then.
- mkirklions 8y agoTypically the founder of a company owns the company. So unless you want to buy the founder out, the founder still has ownership. Sure the moment it goes public, you need to ask the question 'who leads?', but you will have to buy out the owenership.
- jartelt 8y agoYes, founders always have ownership, but it is not always the case for the founders to own more than 50% of the company after a few financing rounds. Startups that do super well can pull this off, but I think it is safe to assume most normal startups do have super majority voting schemes that give founders total control of the company.
- dpark 8y ago> Domo actually is part of the Salt Lake City region’s “Silicon Slope,” one of several regional offshoots of Silicon Valley. Going off on a tangent, this is really dumb. It’s not an “offshoot” of Silicon Valley. It’s a distant, unrelated region that happens to also have a tech industry. Are Austin, Seattle, and Portland also “offshoots” of Silicon Valley? How about New York? Zurich?
- pm90 8y agoIts a lazy way to jump on the SV bandwagon. So Austin is/was known as Silicon Hills or something and there are many other Silicon Something monikers for other places.
- retr0grad3 8y agoSilicon Hills actually refers to the boom in chip manufacturing in ATX in the 80s and 90s. After the dot-can boom and bust it now has the “like Silicon Valley but ‘weirder’” connotation.
- hpcjoe 8y agoI wonder which state will be Silicon Commode ...
- thewhitestguy 8y agoCalifornia.
- yongjik 8y agoWell, at least they copied the meaningful part of "Silicon Valley". In Korea we have Pangyo Valley and Teheran Valley. (And no, they aren't valleys.)
- DonHopkins 8y agoSilicon Sinkhole
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- cowpig 8y agoWhy isn't something like buying goods and services from a company you (or your brother) own with investor money illegal? Unless I'm missing a reason why that would be ok, that should be criminal? And then I don't understand the link between founder control and unethical behaviour. I've seen plenty of cases of corruption in investor-controlled companies. The article doesn't even attempt to make a concrete connection despite implying it over and over.
- twunde 8y agoThe implication is that because the founder owns so much of the company, there are very few options left to the investors to correct this behavior. Here the options are to not invest in a new round or bring a lawsuit. At a normal company, the investors could force the founder out as CEO, bring in other execs or force the company to address specific issues.
- tntn 8y agoSeems pretty unsurprising given that domo is by all appearances the result of the Utah County MLM-royalty types getting into tech.
- 58x14 8y agoI share the name of the CEO (it’s quite common) and I own the domain hack joshjam.es. A few years back I drove out to Salt Lake City to see if he would have any interest in purchasing it... now that I know the company is throwing money away, I’m tempted to retry!
- whatsstolat 8y agoPost back on how you do. :-).
- enknamel 8y ago>putative Never heard that word before. Other than that, the isn't really anything new in this article. Successful startups are rare. It's rare that they even survive going public.
- bigtones 8y agoIt's the almost forgotten cousin to the much overused "alleged".
- NorthOf33rd 8y agoI'd love to see the LA Times go back and revisit the Utah Valley region and the culture that helped contribute to this. The Utah Valley is chock full of startups with a serious inferiority complex to their big brothers in Silicon Valley, hence derivative name. More importantly, Utah is the “multi-level marketing capital of the world [1]” This kind of sales and growth tactic is not limited to the diet smoothie and cosmetics world, but is absolutely pervasive in the valley. Note- SLC and the Utah Valley may be united in the Silicon Slopes moniker, but they are about as similar as Austin and Waco, TX. A few observations on Domo 1) The product is weak. It’s pretty dashboards with very limited “real” BI capabilities. The connectors are custom, not OOB/end user configurable – unless end user happens to be IT. 2) They seem to be aware that the product is weak, as their demos include an NDA. Until recently there was almost no “real” information available on what exactly Domo is or does. Only void marketing speak. 3) Their absurd domopalooza (or DP for short, no joke) events included artists like Kesha and Macklemore. 4) Their totally overblown marketing hype surrounds an incoherent me-too product roadmap. Rather than focusing on building a quality product they are going for checkboxes and chasing after Slack etc with features like Chat 5) They have a billboard that reads “If Hillary Had DOMO She would have won.” I've been predicting for a while that DOMO’s hubris would cause it to be one of the first in the scene to fail spectacularly. What worries me about that prediction is the economic harm that would do to the rest of the Valley especially given the impact of MLM economics. 1- http://kutv.com/news/local/follow-the-profit-how-mormon-culture-made-utah-a-hotbed-for-multi-level-marketers http://kutv.com/news/local/follow-the-profit-how-mormon-cult...
- NorthOf33rd 8y agoI should say, in full disclosure, that it worries me because I'm a product manager in the region. So, I am concerned about economic blow back to firms that have better business practices and therefore my ability to practice here. Though, I'm currently seeking remote work opportunities as this is a pervasive issue.
- joshdance 8y agoI work in Utah Valley at a tech startup in the space. While I agree that there are some startups with 'inferiority complex' etc, there is a growing number who are happy and proud to be a Utah startup and what that entails, not just chasing Silicon Valley. The instant connection to MLMs is unfortunate and something we are trying to move past. I would argue Utah has a very strong sales culture not solely because of MLMs but for other reasons.
- nerdponx 8y agoI find it weird that the article doesn't actually say what Domo does.
- win_ini 8y agoFrankly, they don’t do much. It is nota kind of company that is “the Uber of...”. It is “The shitty version of ...” (insert Looker, Tableau, etc.)
- tntn 8y agoThat's mostly because Domo doesn't really say what Domo does.
- hathawsh 8y agoDomo is an analytics company: "The pitch for Domo was that it would fill in some of the gaps in enterprise data analysis that Omniture had left open, providing access to real-time marketing information that would help CEOs run their companies more efficiently."
- TheHegemon 8y agoOh god. Omniture is one of the worst software I've had the misfortune of being forced to implement. I'm not surprised the same founder is running into issues here.
- JumpCrisscross 8y ago"Domo also has spent $600,000 for catering services from Cubby's Chicago Beef, which describes itself as 'a cute little sandwich and salad restaurant.' It’s owned by Josh James and his brother Cubby. ('The menu does look delicious, but there must be caterers in American Fork, Utah, that aren’t owned by the boss,' remarked Shira Ovide of Bloomberg). Domo also has bought $200,000 in furnishings from Alice Lane Home Collection, an interior design company partially owned by James, at which Drew James, another brother, is an executive." Wow.
- dustinlocke 8y agoFor real though Cubby's is so good. If I worked there, I wouldn't be upset about the relationship because it's a very popular restaurant.
- hathawsh 8y agoThe wild rice and kale salad is especially tasty. (Here's a copycat: https://meaningfuleats.com/chicken-kale-wild-rice-salad/ https://meaningfuleats.com/chicken-kale-wild-rice-salad/ )
- austenallred 8y agoHaving lived in Utah and eaten at Cubby's, that's the one part of the story that shouldn't raise an eyebrow. If it's between Cubby's or Kneaders give me Cubby's all day.
- thousandautumns 8y agoIts not bad, but I would always get it confused with Chubby's which is far better in my opinion.
- JohnJamesRambo 8y agoCall it what it is- a pump and dump. People can put lipstick on the pig but it’s just the same old scam that is centuries old.
- luckydata 8y agoI'm so glad the Domo chickens finally came home to roost. It's been pretty painful to observe all the undeserved hype around this company over the year, I felt for a long time like I was taking crazy pills.
- huy 8y agoI work for a BI startup (competitor to Domo), so as part of my work, we did our own analysis of Domo product, and also chanced across prospects/customers that are current/ex-Domo users. Domo is very "business users friendly", they do this by: - Very pretty (and drag-and-drop capable) visualization. Not as compared to Tableau though, but still. - Native mobile apps - Their Domo cache + datasets concept, that makes it easy to load simple data into Domo and visualize - Their commenting system? I suspect that it's these things + all the marketing that made them sell well in certain contexts. They have the dataset concept that ties to their cache, which makes it easy for business users to upload a file and "just explore", but then joining these datasets together is not quite straightforward. And you have to load each dataset one by one. So it's good for very basic use cases, but for advanced stuff that requires proper data preparation, it starts to fall behind. Also soon Domo customers would run into performance problem, since Domo hosts the data for the customers. Besides that, I feel like the entire product is a patch work, without proper thorough design/thinking. Feels like they hire a lot of different product managers, each responsible for one feature, but the features they don't fit together very well.. Some I even find redundant (seriously what's the 3D visualization of datasets/data sources in the product homepage for?). It's been very interesting for me to observe the space. Our startup, we took the directly opposite approach to Domo in building our business: totally bootstraped with no funding. We've been profitable since year 1, working with customers from unicorn startups, public companies to fast-growing startups. We're very conscious/aware about the space to shape our product strategy. I think ultimately the team and the product are the most important in the long-term success. I can say that among the solutions, we're most impressed by Tableau, PowerBI and Looker. In case you've read this far, do check us out: https://www.holistics.io https://www.holistics.io
- thongda 8y agoOn the product side, another way to say is lacking of vision, strategy and roadmap
- Multiplayer 8y agoI was at the conference referenced in the photo - SAASTR 2017. The level of arrogance of the CEO was striking - down to the literal slouch in the chair for the entire talk. I've remarked several times to people that he was the most arrogant conference panelist I've ever seen. The line between confidence and arrogance is pretty distinct in my opinion and at that time this ceo had no idea where that line is.
- mathattack 8y agoHere’s what was left unanswered.... How will the investors do? If the investors at a 2 billion valuation take a bath, they will think twice. If they make money, they won’t care. Same with IPO investors. Nobody forces them to invest, and there is a move to take these companies out of indexes. The strange thing is the self dealing. The founder is already wealthy. Why create the risk of a stink to get a little more money? The damage to the IPO is much higher than whatever he pocketed. This is the true hubris.
- deleted 8y ago[deleted]
- georgeecollins 8y agoAs an example of what can go wrong with two tier voting stock, look at the conflict between CBS and Viacom. I don't agree that a founder should have a greater voting share than his or her ownership. I know that has got to be a really unpopular view here. But even if you don't agree with me, how long is that voting ratio supposed to last? Can it continue after you break up the company into pieces? Should it apply to ancestors of the founder?
- drelihan 8y agoShouldn't the criticism for IPO terms like this be directed at the money managers buying these shares on behalf of their clients? It is ultimately those making the capital allocation decision to push back on unreasonable terms. Seems like they "sort of are": "Domo acknowledges in its disclosure statement that Standard & Poor’s will be excluding companies with these structures from some of its indexes, and other index owners may follow suit. That’s a problem for Domo, because the rise of passive investments keyed to stock indexes means that many investors won’t be buying its stock."
- asah 8y agoIMHO the comments here and seekingalpha are unnecessarily critical and frankly, kind of lame. 1. I tried Domo a year ago: it's actually quite nice and easy to setup, much easier than Tableau was. A couple of friends tried to deploy Domo at scale: it's no easier than other enterprise BI i.e. a pain. The devil's in the (enterprise) details, and it's fair to say that none of us here on HN really know. 2. web BI is severely crowded, so it's natural for a company like Domo to burn huge amounts of cash to earn marketshare, just like Lyft, GoDaddy, Monster.com and others did. It's risky, but enterprise BI is risky. 3. buying services from insiders is a common practice and isn't a red flag on its own, if the expenses are reasonably justified and the prices paid are reasonable (i.e. at a discount). There can be big savings in transaction costs (e.g. salesrep commissions) and potential tax savings (and yes, there's completely legal versions). 4. lavish expenses? really? Y'all need to see what startups pay in San Francisco for rent, let alone salaries. Good on Domo for spending on their Utah staff! See other comments in this thread about private jets: for business travel, it can be a nominal expense and staff LOVE IT. I owned a company in the corporate food space that catered to the top tech companies and VCs: $300K is not large. 5. anti-Utah? SV-bias? really? I wish I'd owned IPO stock in Dell, Qualcomm, Microsoft and Amazon. disclosure: I don't own stock in Domo, don't plan to own stock in Domo and know anyone at Domo. Ditto for other companies in the BI space.
- deleted 8y ago[deleted]
- devj 8y agoWhat are the other alternatives in this space? Segment?
- airspace69 8y agoI used to work for the former VP of product for DOMO... the stories he told me does make me feel surprised by this story. The CEO led by a sort of "cult of personality" without having a clear direction (that was relayed to the workers/staff) of what he wanted Domo to do. Its a serious leadership failure.