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working at a zombie company that has no traction is not fun for anyone part of the “challenge” of being a famous founder is you can raise pre product. $75M se
by tempsy 7y ago
working at a zombie company that has no traction is not fun for anyone
part of the “challenge” of being a famous founder is you can raise pre product.
$75M seems insane for a company like that. Burn couldn’t have been that high, mostly rent and salaries, no heavy computation, etc.
- baddox 7y agoWouldn't rent and salaries (at least in the SF Bay Area) almost always be vastly more expensive than computation?
- tempsy 7y agoDepends on the company. If it’s a marketplace like Uber then you’re burning a lot of operations. If it’s ML or heavy compute then AWS bills.
- toomuchtodo 7y agoHonestly surprised a bunch of VCs haven't gotten together yet and built out their own compute for portfolio companies considering how much VC money gets shoveled into the AWS fire.
- acdha 7y agoThink about the hundreds of engineers they’d need to hire, purchases for hardware and software, security approvals, etc. that would all need to be spent up front with no guarantee that it’d actually be cheaper. Beating the major cloud providers requires some combination of large scale and/or cutting corners and most companies are not at the point where the infrastructure costs beat the staff time needed.
- toomuchtodo 7y agoI used to do ops, costing for infra, build out datacenters, I’m aware!
- baddox 7y agoThis sort of thing actually does happen, right? Isn’t that basically what WeWork was, but for all the VC money companies are spending on office space?
- deleted 7y ago[deleted]
- coderintherye 7y agoThey noted in the article they didn't spend all $75M and that they are returning some to investors. That was probably part of the decision to shut down quickly to get some money back to them.
- lmeyerov 7y ago100 people x 150k yr = $15M. Add insurance, office, heaaavy marketing, sales commission, non-frugal everything.. I'm guessing $20-30M over their 2+yrs. Maybe even more on people bc hiring lawyers. Weirdly, the investors are happier with that than 5 smaller series A's of money-making / real-IP companies with existing growth engines. Easier to bet on nothing vs improving. I do find the flameout odd, and not isolated to Atrium. Why flameout vs spinoff a small business for folks who wanted to continue? Same difference to the investors, but meaningful to the lives of the believers. Worst case, just OSS for them.. Thinking more: A good comparison is Carta, also in legal, whose funding was more correlated to revenue and growth.
- manigandham 7y agoThe end of the first paragraph says: "The separate Atrium law firm will continue to operate." The legal talent already did spin-off with the last pivot.