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Hey folks, Cofounder of DigitalOcean here. Letting people go is always a complicated matter at any scale. Whether you are a ten person company and firing one
by raiyu 7y ago
Hey folks,
Cofounder of DigitalOcean here.
Letting people go is always a complicated matter at any scale. Whether you are a ten person company and firing one employee or you are 500 people and firing a larger number.
Wanted to address a few statements from the hackernews community here.
We are not prepping the company for sale.
As unfortunate as the layoffs are they were really due to two CEO changes in the past 18 months and leadership changes that created competing directions in the business, which Yancey our new CEO, is now addressing.
We are not running out of money, nor do we have an immediate need to raise capital, and the lay-offs aren't related to any sort of "cost-cutting".
We last raised an equity round in the summer of 2015 and haven't had a need to raise capital since. This is because we are very capital efficient and have been since our founding.
There are no profitability issues with $5/mo customers as the unit economics are the same as larger accounts. As we have grown we have added more products and features so that scaling teams and companies can also be successful on DigitalOcean, but we are not changing our commitment to the individual developer and those who are just getting started.
Lastly, it pains me to see people let go, having been on both sides of the table, it honestly just really sucks.
- yowlingcat 7y agoAppreciate the response! Are you at liberty to say a little more about the competing directions that, for lack of a better term, didn't win out? How will these changes impact customers, and could folks be left stranded in any way?
- raiyu 7y agoThere is no impact to customers now or future. The changes were mostly internal in how teams were structured and was the result of leadership changes that happened. From the customer perspective we have never launched a product and then killed it. Anytime you are dealing with infrastructure and building services that other companies rely on for their business you have to be very sure that whatever you launch you plan to support just about forever. A lot of the changes are actually about getting refocused on what made us successful, which is developers and the larger developer/open source community.
- neovive 7y agoAs a long-time loyal customer, I just want to thank you for your honesty and for providing such an excellent service to developers for so many years. Keep up the amazing work and best wishes for continued success.
- LordAtlas 7y ago>From the customer perspective we have never launched a product and then killed it Can you please deliver a talk at Google some time?
- notjustanymike 7y agoWould you mind teaching StackExchange a thing or two about PR while you're doing a good job here?
- raiyu 7y agoI think it's a learned behavior. The more time you spend in the corporate world, the more comfortable you are with corporate speak. I haven't spent any time in the corporate world and I personally value honesty very highly, so I always try to be as forthright as possible, while still respecting the privacy and feelings of other individuals.
- porker 7y agoDo you have any recommendations for learning to communicate better- like the way you do? Did you follow any courses or books to develop your tone, writing style or the graceful way you respond?
- alexitosrv 7y agoIn case someone else, like me, is wondering about what is going on with StackExchange, I think notjustanymike means this: https://meta.stackexchange.com/questions/342039/firing-community-managers-stack-exchange-is-not-interested-in-cooperating-with/342045#342045 https://meta.stackexchange.com/questions/342039/firing-commu...
- notjustanymike 7y agoCorrect!
- deleted 7y ago[deleted]
- ummonk 7y agoI assumed it was a reference to the ridiculous firing of Monica Cellio. Apparently they've done more stupid stuff?
- leetrout 7y agoThank you for posting this and providing some perspective.
- cdiamand 7y agoThank you for this! As an individual who relies heavily on DO for getting small projects off the ground, this is reassuring to hear.
- treebornfrog 7y agoThank you for writing here in the thread. I was literally looking at options to migrate, but now I can sleep with ease. All the best, love DO, simple + clean and get's the job done.
- hashhar 7y agoDigitalOcean has been instrumental in helping me transition from a college graduate into a professional developer who can build and design entire backends. Those 5$/mo droplets let me explore a lot of software and run proper production-like benchmarks for my own learning. Over time I moved a lot of my personal projects and infra over to DO (and started working on new ones now that I had a good provider to host them on). And now with the new managed offerrings for the CORE technologies people need (databases, caches, K8S etc.) I'm happy to see that I can start being a little more productive with my side projects. So, in essence I want to thank the people at DigitalOcean for what they've built and continue to build.
- raiyu 7y agoThank you for sharing. Our goal with DigitalOcean was always to help more people get involved with technology. The community team that is one of the pillars of DigitalOcean was built by Etel. She herself went through this transition. She graduated college with a liberal arts degree and was working as a bartender because she couldn't get another job. I gave her a book on programming and told her that if she figured it out I would figure out a way to get her a job. She indeed did figure it out and when DigitalOcean was able to start hiring, she was the first hire we made. Initially she worked customer support, and soon after we put her in charge of building "community". She wrote the first several hundred articles herself. She then went on to build an entire team of writers and editors and community managers. And that team also created amazing events both on a local scale as well as Hacktoberfest. So many people have been thankful for to us for our articles and resources, but they wouldn't be what they are without people like Etel. It's really an expression of who she is and her beliefs and values as a person. That's why we want to continue investing in community and ensure that those individual developers just getting started feel like they truly have a home at DigitalOcean. Because those are the very same people that built DigitalOcean in the first place.
- hashhar 7y agoI can honestly say that one of the reasons people hop onto DO is due to those amazing tutorials and documentations. I know I was. It's surprising really that in all the praise I threw to DigitalOcean the awesome documentation and tutorials flew under my radar. That's not to say that I don't value them. Rather the complete opposite. They had become such an integral part of my life when getting my hands wet with a new technology or a tool or setting up any new software or system that I completely forgot that they were something that someone invested a lot of time writing. I was still in college/starting out then and had never learned that most developers don't document things (let alone write tutorials). I believed there must be internal websites similar to DO's documentation and tutorials in each company and took DO for granted. It'd be really great if you could share my thoughts about how great and instrumental the documentation and tutorials have been to Etel and the team specially. Also, have a great weekend.
- jhhdow 7y agoReal cool to see this kind of explanation provided in the HN comments and not to any of the people who got the axe. DO love!
- Aeolun 7y agoHow do you know they didn’t get that explanation?
- MuffinFlavored 7y ago> We are not running out of money Are you running at a profit or at a loss?
- raiyu 7y agoOur profit/loss for the year is determined by growth rate. In 2013 when we hit product market fit, we ran at a huge loss (on a percent of revenue basis), so much so that we wouldn't be able to survive without raising capital from investors. That or 90% of the customers signing up wouldn't be able to launch a droplet. We are running at a modest loss now, which is ok because we are growing and also because whenever you launch a new product or feature the up-front costs are much higher to get the initial product built and there is no revenue contribution from it until it's launched and has ramped up. But even so we did manage a completely net profitable year in our history in 2017, which I'm very proud of, and have been at a slight loss in other years. We still have plenty of our Series B raise in our bank account. When you look at today's IPOs they are losing 40% more money than they collect in revenue! We are no where close to that. As we have been net profitable already, and now are just fine tuning our investment vs return, so that we can continue to grow responsibly.
- seppin 7y ago> Our profit/loss for the year is determined by growth rate. Could you operate at a profit if you wanted to?
- nik736 7y agoI guess the problem for DO is buying hardware, upfront costs for colocation (renting cages without actually using all of the available cabs/space), etc.. If they would stop buying hardware, which means no more growth and available resources, they would be super profitable.
- MuffinFlavored 7y agoWhat's your biggest fear? Are you competing with Heroku free-tier or AWS?
- avip 7y agoConfused to see CEO of a big company just says the truth in simple terms. Did you pass that through legal? :) Thanks, yours, another loyal not-customer-support-harassing 5$/m DO customer.
- raiyu 7y agoHaha, thanks but I'm just a cofounder not the CEO, and no it didn't pass through legal =]
- hn_throwaway_99 7y agoI was actually going to comment on how much I like your communication style, so I'm glad to see it getting praise from other HNers. Besides the lack of BS, I think I can learn a lot from your sentence and paragraph structure. Well-thought-out but to-the-point sentences. Short paragraphs. Direct communication on a difficult subject that shows empathy but doesn't try to sugarcoat. Thanks, I bookmarked this page just as a reminder of effective communication.
- freakynit 7y agoGenuinely loved your way of communicating facts. Simple, to the point, the way it should be. #LoveTheSimplicity
- mrtweetyhack 7y agothe truth is never the truth
- sneak 7y agoWhy would you lay people off if not to cut costs?
- georgeecollins 7y agoBecause of a change in direction of the company. People often have skills and ambitions that relate to specific tasks. If the company no longer wants to do those tasks, those people can become redundant.
- echlebek 7y agoPeople are usually flexible enough to switch directions. I wonder how many of those laid off employees would have been happy to do so given the chance?
- mejari 7y agoI would assume such things were considered. You should also wonder how many people weren't fired because they did switch directions. Don't assume you have the entire story.
- peterwwillis 7y ago> ".. two CEO changes in the past 18 months and leadership changes that created competing directions in the business .." They had several different chefs that all had different ideas about the menu, probably resulting in too many odd dishes, and maybe more cooks than necessary. That might lead to not executing well on the dishes at hand. Refocusing on a few good dishes, and making sure there's not too many cooks, might result in a better dinner. Unfortunately, that may require letting some cooks go.
- christophilus 7y agoI’m really glad DigitalOcean exists. Ignore the haters.
- dubliner2077 7y agoThere is also Scaleway.
- adar 7y agoIf Scaleway moved into North America I'd move more VPSes to them in a heartbeat.
- lxe 7y agoI wish all company execs made straightforward and human-sounding statements like this one in response to questions about difficult matters.
- busymom0 7y agoThank you for this! As someone who spends okay amount of money on DO ($40, $15, $5, $5), the title of the post gave me a bit of a scare but your comment helped me calm back down. Thank you! I used to be with AWS before (still use their S3) but now I have switched from EC2 to DO droplets. Only thing I am missing with DO is the ability to set up ACL on the firewall itself so it can only be reached via cloudflare and the firewall IP isn't exposed to outsiders.
- alexis_fr 7y ago$140 user here. I need DO to stay online for its simplicity. I simply don’t understand AWS and I’m too scared to wreak a subnet while trying to add lambdas and API Gateways. I wouldn’t mind spending double if necessary. Also, clicking in Create Droplet then on a big « $10, xGB RAM » button is incredibly clear to me. Then I « ansible » it and it’s live. Please don’t add too many services to Digital Ocean ;)
- busymom0 7y agoThat's another thing I liked about DO more than AWS. AWS seems too overwhelming as they have too much going on. DO is simple. The thing I am proposing about the ACL on firewall already exists in DO - but it only exists for the droplets. I don't think it would be too hard for them to port it over for the firewall too without making things too complicated.
- getlawgdon 7y agoI'm glad someone said it. I dont understand AWS either.
- steve_adams_86 7y agoI put a lot of work into understanding AWS and gave it an honest try for 6 months or so, and ended up realizing it's an approach to solving a problem that simply doesn't jive with me. I went back to DO, and it made both personal sense for me and economic sense for the product. It's obviously an incredible platform with excellent tooling, and it probably powers most of the websites I use. But like most trades the same job can be done to a similar standard at a variety of scales using wildly different processes and tooling. And that's fine. The economics seem to be inverted (AWS is large scale and quite expensive in my experience while DO is smaller and cheaper), but it's also not a perfect analogy. I just won't begrudge anyone for using a tool or process I don't love. If it gets your blog or multi-million dollar revenue product online, that's awesome. I'm glad I can say I used some AWS stuff on my resume, but for my own work I'd only use it if it had a clear advantage over whatever else I'm using.
- mrskitch 7y agoThanks for posting. I run browserless.io on DO, and want to keep it that way. Many have posted about about how they use DO for small projects, and I started that same way, but now it's the muscle behind a much bigger thing. Appreciate you chiming in.
- wackget 7y agoYour service looks interesting. On your homepage, "Emoji's" shouldn't have an apostrophe; it should just be "Emojis". :)
- AznHisoka 7y agoBeen using Browserless for 1+ years and amazingly, have never had any issues with it. It just works. Support is awesome as well. I think you answer every single support email I've sent.
- mrskitch 7y agoThanks for that! Appreciated! I have another person help with support now, but I really enjoy the dev stuff so I jump on those. It’s what got me here in the first place :)
- idclip 7y agoA very mature approach, more power to you and i will certainly be checking out your warez.
- SmoothHacker 7y agoI just wanted to say thank you for providing an amazing service. DO is my number one preferred cloud because using Azure and AWS is incredibly difficult because of their UI. Thank you.
- fogetti 7y agoSo basically it's due to bad leadership and office politics... In other name incompetence?
- drefno 7y agoDo you feel that any business that isn’t perfect is run incompetently?
- fogetti 7y agoNope. I think if two CEOs are not enough to make one business strategy that's incompetence. Is there any reason to think otherwise? They failed at what they were supposed to do and now they can't take any blame???? WTF?
- kull 7y agoThank you for this comment. We run our startup on DO and seeing news like this always make me wonder if I should start looking for plan B, a new server provider. Your service is outstanding and a transition of 30+ large droplets to some other provider would be painful so I really hope you guys are doing well.
- zhte415 7y agoI too am a long term DO user that loves the simplicity and well thought out product, and the customer service. But that doesn't not mean not having a Plan B just in case. And think it out. Do you want redundancy in provider in case you're blocked? Do want redundancy in payment system in case your bank blocks you? Do want redundancy in data centre in case a data centre is destroyed or becomes unavailable? Other, staff unavaibility plan, etc. All of these have some cost. Think what's most important for you.
- shreyshrey 7y agoHey thank you for your sincere reply. Felt touched. We use DO (not in a big way though). But it always has worked for us. Just curious, why DO needs an outsider as ceo rather than somebody from founding team?
- dboreham 7y agoI have no idea about the specific people here but common reasons: missing skills/experience in the founding team. Sometimes something quite focused such as "have run a public company".
- boycaught 7y agoWell-stated.
- neycoda 7y ago"We last raised an equity round in the summer of 2015 and haven't had a need to raise capital since. This is because we are very capital efficient and have been since our founding." If you haven't had a need to raise capital since your founding because your were capital-efficient, then why did you raise an equity round in 2015? Either your statement is worded inaccurately or you did need capital funding after your founding, indicating you also need it now or will soon.
- getlawgdon 7y agoThe original wording makes sense. Capital is for scaling an already efficient model.
- mlthoughts2018 7y agoThis doesn’t really track as an explanation. Why couldn’t you restructure teams or retrain people instead of firing them? If it was an internal organizational conflict as you say, it seems rash and strategically unsound to let good people go instead of refactoring the internal conflict in a way that deploys those people in other roles, or at least some of them. While I don’t think there is anything deceptive or mean-spirited about your comment, it just doesn’t add up, and comes off a bit like the same old corporate verbal shuffling. Nothing obligates you to comment or speak out on this. Why do so here in this forum if this is all there is to say?
- ptcampbell 7y agoNot that we are owed an explanation, but I didn’t see a reason either.
- rolltiide 7y agoyeah, forever-jobs are the main misaligned expectation from the market. laying off people isn't controversial, but too many businesses avoid the action until there actually is a controversial issue with the business.
- deleted 7y ago[deleted]
- HonestShark 7y agoMoisey, big fan of yours, always have been. DO's board has been atrocious (not you and Ben). The way they handled bonuses even the years that we were growing 40+% because we missed #'s due to factors outside any employees control, was a joke. The hiring of Mark Templeton was one of the absolute worst things that could have happened, he damn near put DO on the brink of destruction. That said, it seems like Yancey is doing all the right things. The internal DO culture has been coddled for way too long and has been way to top heavy, predominately due to the revolving door of engineering leadership. Since I joined, I've seen Julia, Greg, Dizzy, now Al w/ Barry... and that's been what like 3.5 years? The Boards support of the current GC is also astonishing, he's been incredibly anti-people and has downright participated in discriminatory practices. I'd HIGHLY encourage DO to setup an ethics hotline, there's been a long-term lack of ability to report concerning behavior without fear of reprisal. Also, in your previous comments, yes the profitability #'s look surprisingly good, but lets be honest with the community and talk about cash. It's easy to look profitable when you are capitalizing so much, and it's not a fair representation of company performance. While I admittedly don’t really have any transparency into our #’s, its been talked about internally plenty that we have a cash issue. (Although it’s never been indicated that it’s desperate, and for those reading the company isn’t in financial distress, although they’ve been subtly cutting a lot of benefits and doing things to save cash like reduce travel, cut meal benefits, etc). I'm proud of Yancey and Bill. GC needs to go, period, demonstrate ’togetherness’ Yancey talked about by showing us that accountability applies to all levels. Head of people is doing her best, but we deserve someone that wasn’t a Mark hire that understands our industry, and CTO I'm on the fence about, he's not an inspiring leader. (Apologies for the throwaway account, surviving here for as long as I have has been difficult. I’ve connected through TOR and two VPNs, and don’t know PW so will never be logging into this account again — so, don’t bother trying to find me.)
- AYBABTME 7y agoI feel like a message like this is better sent by throw away email or something else that's private, than put in a public forum for all to see. What's the point exactly in putting all this ostensibly proprietary information out there, on HN? Is it benefiting anything to the conversation, aside from satisfying some people's curiosity? What's the intent here, why do you feel that this sort of post needs to be done publicly? What does it improve?
- pc2g4d 7y agoAs a longtime Digital Ocean customer, I just want to say that it's amazingly refreshing to hear directly from somebody with such insider knowledge. Kudos for clarifying the situation for us.
- jonstewart 7y agoThank you for DO. My $5/mo droplet running Algo vpn has been great.
- capdiz 7y agoBeen a while since I logged in and commented on hacker news, but I had to login in order to give testimony on how digitalocean has been helpful to me this past year (2019). 2019 was one of the worst years for me financially, jobless, in debt and with a one year old child and girlfriend to look after. I was always late on payments for my 5$ digitalocean droplet and would always have my account suspended. I would always ask for an extension period and the wonderful guys at digitalocean would gladly grant me an extension and lift the suspension off my account. And when I read the story my heart skipped a beat wondering what was going to befall my entrepreneurship dreams this year. Thanks a lot for the comment and am forever grateful to you and the team at digitalocean
- dutchrapley 7y agoThere's no reason to be apologetic. The fact of the matter is that there are two types of employees, those who work and those who have a job. Employees who work are creating value, whereas employees who have a job are trading time for money. When a company becomes a certain size, it's inevitable that you will hire people looking for a job. Firing people sucks. Yes, it affects their livelihood, but having warm bodies on your roster affects your business. The problem with people who have a job is that they affect company culture as they set the tone for acceptable and unacceptable behaviors in the workplace. It spreads like a disease and the effect can cripple those who show up to work. Sometimes, this can lead to confusion as people who have a job might think, "I was doing what I was told. I don't understand why." Creating value is much more than simply following orders.
- blowski 7y agoI have seen nothing to suggest that the people who have lost their jobs weren't working hard enough or creating enough value. The comment above merely says the jobs they were doing are no longer considered strategically valuable, and that's no fault of their own.
- xenihn 7y agoI think his point was that you're no longer creating value when your job is no longer considered valuable.
- blowski 7y agoI interpreted it differently, like it was saying "some people are lazy, and you need to get rid of them". If I were one of the people who'd just been made redundant because a layer of management above me changed strategy, I'd find that comment really hurtful.
- kilburn 7y agoMany, many years ago I worked at a small company, mostly on a single project for a single client. Out of the blue, one day the boss summoned me and told me I wasn't delivering enough value so I would be leaving. I knew he was lying (I had the numbers), and it still made me feel terrible. If someone here is on a similar situation, let me tell you this: if you do your best and yet they tell you "you don't deliver enough value", it is the company's fault, not yours. Really, just shrug it off and move on. Keep working hard and things will eventually work out. PS: Four months later they wanted to hire me again, paying 50% more than before. I already had a better job ;)
- NotZachari 7y agoListen, man, this sort of "coverage" of these types of events are the result of being at the top of the field. No one likes to watch people lose their jobs, especially when their name is at the top of the list of people in the company. That being said, you clearly already know that this wasn't anything done without reason. You guys haven't always nailed it, but overall, all of the points you've listed show that the ship isn't sinking even if it took on some water. It's great that you addressed this and all, but overall, all of this is a sad part of business. As long as it's not taken lightly and everything that can be done to avoid a repeat of this in the future is being done, that's all you can really do.
- j45 7y agoWould it be possible to allow the ability to download one's backups or snapshots? There are no shortage of requests for this feature and as owner of my data and VM, I'm simply trying to keep an offline backup. Linode has had this feature for a very long time.
- tixocloud 7y agoHonestly, it really sucks to let people go and I would assume it’s not something taken lightly so I admire you for coming out and taking the time to try and address it as best as you can.