[HN Gopher] Bolt announces layoffs
___________________________________________________________________
Bolt announces layoffs
Author : Lapz
Score : 191 points
Date : 2022-05-25 17:23 UTC (5 hours ago)
(HTM) web link (www.bolt.com)
(TXT) w3m dump (www.bolt.com)
| thinkindie wrote:
| just to understand: is this company product similar to Fast.com?
| Is it also the case of an inflated valuation for a very low
| turnaround?
| kleinsch wrote:
| I was in the middle of an interview loop with Bolt mid-Apr, they
| canceled my onsite so they could (supposedly) prioritize
| onboarding people they'd already hired. Dodged a bullet there.
| Also did calls with Coinbase, Uber, and Twitter, who all now have
| hiring freezes.
|
| Boggles my mind how companies flip on a dime between "hire as
| fast as possible" and "the sky is falling, we're laying people
| off." In the case of Bolt and Twitter, there were material
| changes (lawsuit from major customer, Elon Musk) but the others
| are just scared about the economy.
| dvtrn wrote:
| Conversely: "Slow to hire, fast to fire" is something I've
| heard a few times in my career, and usually within
| organizations that turned out to be truly toxic and absolutely
| burnout inducing places to work.
|
| Operating on either extreme probably makes for captivating blog
| posts and "leadership reading material" but in praxis seems
| like it should be self-evidently a bad idea.
| Lapz wrote:
| The founder also encouraged employees to take on what was
| effectively personal debt at an ~11B valuation when they only did
| $5.2M in Q1...
| Solvitieg wrote:
| And "over half" of their employees apparently took on the debt.
|
| Source:
| https://twitter.com/theryanking/status/1493609864534315014
| lelandfe wrote:
| I'm awful at understanding company stock stuff.
|
| > _if the common stock becomes less than exercise price,
| their personal assets are on the hook_
|
| Can someone explain what that may mean for the >50% of
| employees at Bolt that bought into this program, now? I'm
| really struggling to grok what my quoted sentence entails...
|
| edit: thanks much for the quick explanations
| johnzim wrote:
| By taking part in this program, you are essentially taking
| a personal loan, partially secured by your stock options
| which will vest later.
|
| If you don't happen to understand Stock options: At a later
| date you will have the OPTION to buy company stock at a set
| price (often referred to as a Strike price)
|
| So some entity is lending you money because they know you
| have Stock options and presumably will be good for the
| money when they vest/mature.
|
| Of course, if the value of the Stock at the point of your
| options maturing is LOWER than your strike price, you
| essentially have earned yourself the option to buy $4
| apples at the price of $50 an apple. Eg: your options are
| worthless (beyond their ability to purchase shares which
| might not be buyable on a public market)
|
| So since you took out a _personal loan_ you now have to pay
| it back.
|
| EDIT: I missed one thing - you actually get to exercise
| _now_ if you take out this loan... This has slightly more
| upside because it means that you could have in theory, sold
| those shares for immediate upside on the secondary market
| and thereby have de-risked yourself. If you didn't, then
| you got hosed. You could also have a capital gains
| advantage by spreading the gains I suppose
| Karrot_Kream wrote:
| These employees chose to take out a loan in order to
| exercise the options. These employees now own the shares
| that they exercised their option for _and_ a loan to pay
| back the amount of money spent to exercise. If the price of
| these shares becomes _less_ than the price spent to
| exercise the option to receive the share, then the value of
| the employees' shares is now _less_ than the price paid to
| exercise. This means that if an employee wants to pay off
| the loan, they first sell their shares, and then they're
| still on the hook for the remaining difference between the
| sale of the share price and the principal for the loan.
|
| For the Bolt employees who took this deal, I feel bad...
| bombcar wrote:
| "It was different in the 90s" will turn out to be "it's
| exactly the same today".
| JumpCrisscross wrote:
| > _founder also encouraged employees to take on what was
| effectively personal debt_
|
| Do we have evidence to this encouragement?
| nrmitchi wrote:
| The literal entire twitter thread where he was bragging about
| it and how great it was for "his employees".
|
| There is basically no way to read that thread where it
| doesn't sound like an encouragement.
| Lapz wrote:
| This thread https://twitter.com/theryanking/status/1493390167
| 461224451?s... and
| https://twitter.com/theryanking/status/1493609864534315014
| stu2b50 wrote:
| https://twitter.com/theryanking/status/1493390184897032201
|
| I presume the Twitter braggery counts as encouragement.
| [deleted]
| nklende wrote:
| I had a smaller YC company pitch me something like this as an
| option for my stock comp - an RSA (restricted stock agreement,
| or "founder's stock"), where I put up all the cash up front,
| paid a big income tax bill in the first year, but then upside
| was all capital gains. I would technically own the stock but I
| had to sell it back for nothing if I left before it vested.
|
| Turned out I left very early because the company wasn't doing
| great, in the current climate I think they're probably default-
| dead. All that cash is just gone.
| break_the_bank wrote:
| Wow. How'd they make you pay upfront and still make you wait
| & vest? This makes no sense.
| gkoberger wrote:
| For what it's worth, this is how it works for founders too.
| The amount you pay is stupidly small (usually well under
| $100), since the strike price is essentially $0. There's no
| legal designation for founder when it comes to stock, so
| this person just got the same deal the founders did.
| chowchowchow wrote:
| This is actually a great deal when the exercise price is
| low enough. You pay a nominal-ish amount up front to
| exercise early and all gains are LTCG. It is not a good
| deal in any situation where you're not getting in close to
| the ground floor though, if the exercise cost itself is
| substantial.
| upupandup wrote:
| > There IS risk to the employee; they now have a real loan
| outstanding and 100% personal recourse, so if the common stock
| becomes less than exercise price, their personal assets are on
| the hook
|
| https://twitter.com/theryanking/status/1493390184897032201
|
| HOLY CRAP. How is this even legal???
| pfarrell wrote:
| "Don't spend real money on fake money."
|
| Good advice I got from colleagues at a 2000 era company who
| took out loans to buy their options and cover the taxes when
| the stock was at $50/share and then watched it drop to
| <$1/share while they were in a lockout window. I worked with
| people who had 6 figure loans they owed on for worthless
| stock. Took years for the stock to recover.
| berberous wrote:
| It was an option, not a requirement. There are pros/cons to
| doing it, but it was ultimately the employee's decision. I'm
| sure the risks were well disclosed. The issue is >50% of
| employees don't understand any of it, no matter how well
| explained and disclosed.
| gruez wrote:
| >HOLY CRAP. How is this even legal???
|
| You missed the tweet directly under it:
|
| > Therefore, we made sure to give every employee ample time
| to read about the pros and cons of this decision, including
| learning about all the risks in the business, and we gave
| every employee a $300 stipend to consult a financial advisor
| during the implementation process.
|
| I understand making things illegal to protect people from
| being swindled because they don't know any better, but if you
| made decision even after consulting a financial advisor
| that's on you.
| nrmitchi wrote:
| It's kind of different when that decision is saying to your
| boss "Naww, I don't think I'm going to take the offer that
| the CEO was bragging about on Twitter. I guess I just don't
| believe in the company enough."
|
| It may not be perfectly valid, but it's very easy to see
| how someone could feel like they didn't really have a
| choice if they didn't want to sabotage their position and
| future at the company.
| nemothekid wrote:
| I can't see why it should be illegal. People take on debt to
| buy assets all the time. But this is just so irresponsible
| and immoral; I really doubt the leadership is actually
| running a sustainable business; and I'm also starting to
| seriously doubt there was any credibility to the whole
| YC/Stripe boys club thing.
|
| 1. Ryan (was) the CEO, and can pressure employees to buy
| stock (or let them go because they aren't "committed"
| enough).
|
| 2. Ryan loses nothing if the company fails (his personal loss
| has probably already been covered since the first VC round),
| but each employee is left with a mountain of debt.
|
| 3. It's just bad advice. I know plenty of people who took out
| loans for stock; and I would never recommend it; it's
| incredibly risky especially if it can destroy you if it
| fails. If leadership plays so fast and loose with other
| people's money, you have to question how well they are doing
| their job.
| JumpCrisscross wrote:
| > _can 't see why it should be illegal_
|
| Borrowing against one's shares shouldn't be illegal.
| Companies lining up recourse financing for their employees
| should.
|
| How were the terms of the loans chosen? Who knew who was
| and wasn't participating? How was it ensured this wouldn't
| factor into personnel decisions? How were/are the people
| setting the strike prices of options segregated from the
| people setting the terms of the loans? There is too much
| already loaded onto the employer-employee relationship, we
| don't need to add lender-borrower to the damn mix.
|
| (Side note: the $300 stipend for financial advice is
| laughable. You couldn't even get a lawyer to review a
| fraction of such an instrument for that amount, and yes,
| I'd put recourse loans against private shares in the risky
| as hell bucket which should absolutely be legally
| reviewed.)
| berberous wrote:
| The strike prices of options are set based on a 409A
| valuation.
|
| These are "cashless" loans, which are recourse for tax
| purposes (so that the IRS respects this as a true
| purchase of shares, in order to start people's LTCG and
| QSBS clocks). The terms were likely very favorable, i.e.
| set with an interest rate equivalent to the AFR. This is
| not a situation in which the company is trying to make
| money as a lender.
|
| This is no riskier than deciding whether or not to
| exercise your options, which typically employees have to
| decide within 3 months of leaving a startup.
|
| The risk is not in the terms of the loan, but in whether
| the employee wants to exercise and lay out the cash (or
| the promise to pay the cash); in each case, it's an
| investment decision to decide whether it's worth it given
| that the stock is risky and could eventually be worth
| zero.
|
| Note that all these issues are driven by tax rules, and
| generally not the startups. Startups are damned if they
| do, damned if they don't.
|
| Every type of equity has pros/cons. If it's an immaterial
| amount of money, the employee should be a big boy and
| just decide whether or not to risk the cash. If it's a
| material amount of money, the employee should really be
| speaking to their own advisors, which if they have a
| material amount of equity, they should be able to afford
| to do.
| nemothekid wrote:
| > _Companies lining up recourse financing for their
| employees should._
|
| Wait the _companies_ set these loans up? I thought they
| were just going to a bank and getting something akin to a
| personal loan or some other 3rd party collateralized
| loan.
|
| Might as well work for free at that point.
| berberous wrote:
| It's a cashless loan. If you have options that cost
| $10,000 to exercise, the company lets you pay with a
| promissory note (promising to pay the $10,000, plus
| minimal interest set at the IRS's AFR). This is
| effectively the same as the company loaning you $10k, and
| then you hand it back over to exercise, but the cash does
| not change hands.
|
| If you were to get a private loan, the interest would be
| much higher.
|
| The company does not want to be in the business of making
| loans, but this is a way to allow the employee to
| exercise upfront (and thus potentially get certain
| benefits, like in a good exit scenario, of having gains
| be subject to LTCG and not ordinary income), in the best
| way possible. But in a downside scenario, like the
| company folding, the person is on the hook for the loan
| just like if they had decided to exercise with their own
| money.
| [deleted]
| librish wrote:
| The founder pushing employees to take such a reckless financial
| decision while presumably their only insight into many key
| business metrics is the leaderships rosy portrayal of them is
| unethically irresponsible.
| pbreit wrote:
| By "pushing" you mean "not pushing"?
| [deleted]
| hm8 wrote:
| At this scale/valuation of the company, it's probably a bad
| idea but hard to know at the time. My understanding of US tax
| laws and options is that this sort of behavior is what you
| want for early stage startups. You allow early exercise,
| restricted vesting with the upside of paying no income tax
| now, only LTCG on vesting (+liquidity event), and potentially
| QSBS tax exemption if you joined early enough and the startup
| does well.
| nrmitchi wrote:
| Well sure, but the QSBS exemption cutoff is literally 220x
| less than the valuation Bolt was trying to see this on.
| bobbygoodlatte wrote:
| QSBS cutoff is $50M in gross assets owned by the company,
| not $50M valuation. There are many cases where a
| valuation can be far above $50M yet still qualify. That
| said, I have no idea if Bolt would qualify here. FWIW
| financial services companies don't qualify for QSBS at
| all, so Bolt may fall under that
| fdgsdfogijq wrote:
| Talk about turning your employees into bagholders.
| [deleted]
| hahaxdxd123 wrote:
| where did you get $5.1m?
| dburn1169 wrote:
| > when they only did $5.2M in Q1...
|
| This is insane to me. I work at a startup with a similar
| valuation and we bring in almost double that amount of revenue
| a week... and I think we're overvalued.
| silentsea90 wrote:
| 10M a week = ~500M a year. 10B valuation. wow. Where is that?
| beambot wrote:
| 20x Price-to-Sales (P/S) multiple on trailing-twelve-month
| (TTM) revenues is actually on high-end of of sub-$20B SaaS
| right now -- it's just the new reality. Examples from
| public markets:
|
| Cloudflare ($NET) TTM revenue is $0.73B and $16.9B
| marketcap (23x P/S).
|
| DocuSign ($DOCU) TTM revenue is $2.1B with $15.5B marketcap
| (7.3x P/S).
|
| UIPath ($PATH) TTM revenue is $0.9B with $9B marketcap (10x
| P/S).
|
| Okta ($OKTA) TTM revenue is $1.3B with $13B marketcap (10x
| P/S).
| upupandup wrote:
| > it's just the new reality
|
| I wonder whether they are prepared for the next reality
| where these multiples is no longer sustainable.
| scarface74 wrote:
| I never cease to be amazed at how people value companies
| based on revenue and not profit. Revenue without profit
| numbers tell you nothing about how well the company is doing.
| beambot wrote:
| To do a proper net-present value calculation, you need more
| than just revenue & profit. You also want to know growth
| rate, gross margin, and capital efficiency.
| pbreit wrote:
| It's easy to envision profit so towards the beginning
| revenue is much more important.
| scarface74 wrote:
| Unless you are in the midst of a best market where VCs
| don't see a clear exit strategy where they can have a
| successful exit while the company still isn't profitable.
| If you were a startup founder, would you really want to
| have to depend on continued rounds of funding in this
| environment?
| JumpCrisscross wrote:
| > _how people value companies based on revenue and not
| profit_
|
| Profit is a closer abstraction to cash flows ( _i.e._ to
| the investor) than revenue, but it 's still an abstraction.
| Investors looking at revenues and unit economics can
| sometimes--often--predict future profits and discount
| backwards, in the same way that a value investor can look
| at a company's profits and sometimes--less often, frankly--
| predict future cash flows from dividends or M&A and then
| discount backwards.
| scarface74 wrote:
| Profit isn't an "abstraction". If you bring in more money
| than you spend, it means that you don't have to worry
| about a "runway", nor do you have to worry about outside
| funding.
|
| How can you have a successful business that spends more
| money than you make?
| JumpCrisscross wrote:
| > _Profit isn't an "abstraction"_
|
| The term profit covers a number of metrics. All of them
| are abstractions. The number of assumptions that go into
| a GAAP profit figure is uncountable. Profit on a cash
| basis is less wiggly, but it's still--for valuation
| purposes--useful only inasmuch as it is an estimate of
| actual cash returns on the investment.
|
| > _you bring in more money than you spend, it means that
| you don't have to worry about a "runway", nor do you have
| to worry about outside funding_
|
| Lots of ways for cash-flow positive businesses to be
| running themselves into the ground. Garden variety is off
| balance sheet liabilities, though people certainly
|
| > _How can you have a successful business that spends
| more money than you make?_
|
| Nobody argued this, not for the long term. But there are
| loads of situations in which losing money in the short
| term is the long-term savvy move. (This literally
| describes all investing. You send cash out when you
| invest.) Valuation involves estimating the value of those
| future earnings today.
| cecilpl2 wrote:
| Amazon famously turned no profit for nearly 15 years.
| When you run a large business you can do things like
| reinvest what would have been profit into new projects.
| This is the whole point of a growth company.
|
| Recognize that, simplistically, Profit = Revenue -
| Expenses, and that expenses is a dial which can be turned
| somewhat arbitrarily.
| missedthecue wrote:
| I don't think the important thing is necessarily profit,
| but margins. According to Bezos, Amazon had positive
| contribution margins from day 1.
| scarface74 wrote:
| Amazon basically always had positive marginal revenue -
| unlike most of the startups.
|
| People like to cite the one case where it worked and seem
| to be forgetting that most of Amazon's profit comes from
| AWS. What are the chances that any of these startups are
| going to pivot to a competent different vertical to shore
| up their main business? That's just like saying all you
| have to do is rehire the former CEO after a 10 year
| absence and become a trillion dollar company after almost
| going bankrupt.
|
| And no Amazon did not use "excess capacity to jump start
| AWS".
|
| https://www.networkworld.com/article/2891297/the-myth-
| about-...
| VBprogrammer wrote:
| In theory you outspend all of your competitors such that
| they go out of business or otherwise lose out on the some
| network effect. At that point you flick the profit switch
| on and start swimming in pools of money.
|
| I wouldn't like to guess what the success rate of this
| game is though.
| matwood wrote:
| > How can you have a successful business that spends more
| money than you make?
|
| Today or tomorrow?
|
| If a company has to spend more than they make today in
| order to build something they can sell for profit
| tomorrow, that's investing in the future.
|
| Just looking at revenue or profit is too simplistic. It's
| also too simplistic to only look at a single point in
| time.
| dburn1169 wrote:
| I'm not valuing my company solely by revenue, but it's
| easier to compare the values of startups by their revenues
| as a good chunk of startups are focused on growth and not
| profit - and thus aren't yet profitable. Will that start to
| change with the current macro environment? Probably. Was
| only trying to point out how out of wack valuations have
| gotten.
| scarface74 wrote:
| Investors in startups value a company based on the
| likelihood that they can pawn off a money losing company
| either to the public markets or an acquirer.
|
| That doesn't help now that the public market doesn't have
| an appetite for companies that aren't profitable.
|
| So if retail investors aren't interested in non
| profitable companies, there is no profit it in it for
| investment bankers to flip the stock at IPO to take
| advantage of a "pop" meaning that VCs are less interested
| in throwing good money after bad.
|
| How have the former "unicorns" focused on "growth" fared
| in the last few years?
|
| For instance DoorDash couldn't make a profit during a
| worldwide pandemic when everyone was ordering takeout.
| rnk wrote:
| I don't think that's always true. If you are in that
| company, they almost certainly have exposure to the cost of
| those sales and the rate of sales growth, but also the cost
| to support more users. That gives you a good sense.
|
| If you service has complexity and needs lots of hand-
| holding and is expensive to generate the sales, then it's
| harder to say what to do with sales numbers.
| vira28 wrote:
| One of the things that I would consider before joining any
| startups is just how good sane (or humane or whatever appropriate
| word) the founders are. Don't go behind all the PRs. Just try to
| find whether the people who founded are actually good people.
| What are their ethics. All these are subjective qualities so it's
| difficult to weigh but that's where the money is.
|
| edited (I understand I might not have described what I mean
| clearly).
| treyfitty wrote:
| Why do CEOs feel compelled to say "this is the hardest decision
| I've ever had to make." Hoping a CEO can chime in here... is the
| decision really that hard? It seems like they are just trying to
| not seem like a dick, when we all know they're just looking out
| for their own best interests (not saying this is wrong, but not
| saying this is right either). Just genuinely curious how much
| "fluff" that statement contains.
| nrmitchi wrote:
| First of all, there is no mention of what percentage of their
| workforce is being directly effected by this. I suspect it is not
| small.
|
| That aside, I fail to see this as anything other than this
| "company" taking advantage of the current environment to execute
| layoffs in a way that lets them blame "the market" rather than
| their own short-comings. We saw this in March 2020 as well. They
| overhired for the hype, and now are taking advantage of any
| excuse that isn't "ya we hired way to many people so that we
| could say we are bigger than Fast".
|
| Bolt apparently raised $355 million 4 months ago. If they are
| having cash problems, or are concerned about not having enough
| runway, I don't believe for a second that any magnitude of
| layoffs will help them.
| [deleted]
| lr4444lr wrote:
| Even if this is true, we're looking at a tight money policy and
| a bear market in tech broadly with no end in sight. Pre-profit
| companies need to protect their hides, and I expect to see such
| reflected in layoffs and attrition.
| nathanaldensr wrote:
| "Pre-profit companies" LOL. So _that 's_ what they're calling
| them nowadays?
|
| Talk about euphemisms...
| ushakov wrote:
| Twitter still has that status!
| peripitea wrote:
| Why is it a euphemism? Delaying profits as a primary
| objective has been a common startup strategy for decades.
| rvnx wrote:
| Pre-business plan
| trhway wrote:
| >Bolt apparently raised $355 million 4 months ago. If they are
| having cash problems, or are concerned about not having enough
| runway
|
| well, may be there is a connection :
|
| "Earlier this month, Bolt announced it was purchasing crypto
| startup Wyre Payments in a deal worth reportedly worth roughly
| $1.5 billion."
| nrmitchi wrote:
| I was under the impression that that acquisition (along with
| their previous ones) was all stock, but apparently it was a
| mix. In hindsight, that seems like a poor decision.
| Rafert wrote:
| Don't forget they're getting sued by a large customer of theirs
| too, claiming their solution doesn't deliver what was promised:
| https://www.pymnts.com/legal/2022/authentic-brands-sues-bolt...
| nrmitchi wrote:
| Oh I didn't, but I (shockingly) didn't think it was relevant
| here in comparison to the $355M dollars that they recently
| raised. Even an expensive lawsuit would be unlikely to put a
| big enough dent in that to materially affect their runway,
| and it's not like "losing more sales" can make their existing
| revenue much lower (again, in comparison to a $355M war
| chest).
| bko wrote:
| Why do you need an excuse to perform layoffs? Sometimes
| companies over-hire or hire the wrong people. Other times they
| scale back certain efforts and are left with people that don't
| fit into the organization anymore. I feel sorry for the people,
| but layoffs are part of a normal process and with economic
| downturn we're facing, that will almost certainly impact their
| lines of credit and fundraising. So the prudent action would be
| to lay people off.
| stanleydrew wrote:
| You don't _need_ an excuse, but if you have one then
| management can save face. The theory would be it 's a lot
| harder to hire people in the future if everyone thinks you're
| bad at management, and much easier if everyone just thinks
| you got unlucky with market timing.
| kodah wrote:
| Came here to say this, it's one of the first things I
| investigate about a company. If the company does habitual
| layoffs or has done rather large ones in the past five
| years, I'll move on 90% of the time.
| iepathos wrote:
| Yes, this. Thank you for pointing out the scapegoating.
| [deleted]
| 88913527 wrote:
| The more businesses do this, the more the hiring market becomes
| lemons for unicorn-type businesses. Prospective employees will
| wonder if they're an overhire and if question their
| expectations of job security.
| firebaze wrote:
| It's just about the opposite. Know and play your cards.
| autokad wrote:
| yeah. lots of companies already froze hiring (firing through
| attrition). Bolt doesn't make a trend but it gets my
| attention.
|
| edit: I saw on blind indicating its 15% of workforce
| mkozlows wrote:
| That's always been true, and not just for unicorns. Big
| companies let people go in bad times, too; and small
| companies just fold.
| throwaway5752 wrote:
| The more businesses do this, the more people will be out
| there who will just be happy for a paycheck and health
| insurance. Prospective employees will start to be less picky
| and have fewer options, sadly. It's not going to be a good
| time for a lot of people.
| tschellenbach wrote:
| Always ask about valuation and revenue. If the multiple is
| very high run the other way. A high multiple makes it less
| likely that your stock will be worth something, it also makes
| it more likely that the company will have to do layoffs in
| the future.
| IMTDb wrote:
| Both "we overhired" and "it's because of the market" can be
| true at the same time.
|
| You get a $335 million in Feb with a common understanding with
| current investors that you are going to raise $ XXX in roughly
| 24 month, depending on results compared to an agreed upon
| business plan. You thus plan for a roughly 24 month runway. 4
| month later (now) you get a call from your investors that your
| planned next series is going to be significantly lower/harder.
| You now need to stretch your 24 month runway to at least 36
| month. SO you have to adjust plans.
|
| They didn't overhire compared to the initial plan, but
| overhired compared to the current situation, where basically
| all rounds are 50% lower and many are just not happening at
| all.
|
| The ycombinator downturn letter
| (https://techcrunch.com/2022/05/19/yc-advises-founders-to-
| pla...) just says something like this:
|
| > The safe move is to plan for the worst. If the current
| situation is as bad as the last two economic downturns, the
| best way to prepare is to _cut costs and extend your runway
| within the next 30 days_. Your goal should be to get to Default
| Alive.
|
| That sounds exactly like what Bolt is doing.
| nrmitchi wrote:
| > They didn't overhire compared to the initial plan...
|
| Frankly I don't care what their plan was if they "planned" to
| spend ~350M in 2 years while making 10-40M in annual revenue
| while getting sued by their largest customer. That is an
| absolutely insane level of spending. Just because you had a
| plan to do some unsustainable and irresponsible crap doesn't
| absolve you of responsibility when it turns out to be
| unsustainable and irresponsible.
|
| > The ycombinator downturn letter ...
|
| You really think that Bolt, and Bolt's ex-CEO, saw a letter
| from _YC_ , and thought "Oh ya, let's definitely doing what
| YC said. YC definitely knows what they're talking about. I
| personally trust all of their decisions and statements."?
| idealmedtech wrote:
| Do we know the terms of this raise? I wouldn't be surprised if
| it's released in tranches based on KPIs.
| hintymad wrote:
| For a small company, "over hiring" is always a sign of
| incompetency of the management. Think about the good company in
| the early days. They can do so much with so few people, like
| one person evolving zookeeper into a beast to handle FB's
| scale, or two people implemented LevelDB in a matter of months,
| or one person figured out a way to increase the density of co-
| lo rack by 10 times.
| vira28 wrote:
| > or one person figured out a way to increase the density of
| co-lo rack by 10 times. Curious, whom are you referring?
| Sorry for my ignorance.
| bko wrote:
| Reminded me of this:
|
| > Coinbase ended Q1 with 4,948 full-time employees, up 33%
| versus the fourth quarter of 2021. Over the past twelve
| months, Coinbase also said in its first-quarter report that
| the company added over 3,200 net new employees.
|
| https://www.coindesk.com/business/2022/05/19/coinbase-
| outlin...
| ushakov wrote:
| that's a crazy amount for a crypto wallet
|
| are these new hires lobbyists?
| silax wrote:
| The best thing they could do at this point is give employees and
| investors their remaining cash. They won't, but I bet they'll
| wish they did.
| ProAm wrote:
| Why? Business will continue, they are just trimming fat
| (excessively) based on what the market is doing. Next 2 years
| might be rough, especially for ecommerce.
| silax wrote:
| In general, I agree. But for Bolt in particular- they have a
| 2500x _ARR_ multiple, and their top customer is suing them
| for "utterly failing to deliver on its promises" due to
| incompetence in software and lying about the details of their
| relationship, and the general sentiment of the company and
| founder is that of fraud, and the direct competitor just went
| out of business for very similar reasons, and the TAM of the
| market is less than they've raised in VC- I'd say the
| employees and investors can do greater things with the
| remaining capital.
| avl999 wrote:
| Their careers page weirdly shows them still 'hiring' for lots of
| tech and non-tech roles https://www.bolt.com/careers
| cosmiccatnap wrote:
| I'm really tired of this "this is one of the hardest messages"
| cold open. You have thrown innocent people under the bus because
| you don't know how to balance a budget and mitigate risk. One
| thing none of these messages have ever done as far as I'm aware
| is take responsibility for their actions.
| bigtones wrote:
| Bolt laid off around a third of their workforce accord to The New
| York Times, from just over 900 employees to around 660 as counted
| by active Slack users internally.
|
| https://www.nytimes.com/2022/05/25/business/bolt-layoffs.htm...
| druther wrote:
| More interesting details at https://nypost.com/2022/05/25/bolt-
| lays-off-staff-as-payment...
| seizethecheese wrote:
| For those who've seen layoffs first hand: do lower performers
| generally get laid off first, or is it more random?
| kasey_junk wrote:
| It really depends on the layoff strategy and there are lots of
| those.
|
| But for the most part you should treat it as random. For
| instance I was in the room when a company decided to shut down
| a whole location, even though it was very high performing. The
| reason? It had the lease ending soonest so they could cut even
| more costs there.
| PragmaticPulp wrote:
| It's definitely not random, but it's not perfectly ordered
| according to merit/performance either.
|
| Some times entire departments are laid off if their projects
| are part of the cuts. You can be the best performer and still
| get laid off if you're in the wrong department. Some times
| companies will identify key employees and ask them to "re-
| apply" for other positions at the company in other departments.
|
| More often, cuts are made throughout the organization. If the
| company is laying off 5-10% of employees then it's usually not
| that difficult to identify underperforming employees if
| management goes in with a scalpel. However, once the layoffs
| grow to 20-30% or if the layoffs are imposed at a team level
| (many teams are 100% good performers) then you have no choice
| but to lay off good performers as part of the plan.
|
| Actual strategies vary depending on circumstances, but
| generally you retain people who have the most experience on
| critical items whereas newer hires and people working on
| random, nice-to-have type projects are at high risk. Anyone
| with an unusually high compensation relative to their
| performance is also a likely target for cuts. If everyone on
| the team is performing similarly but some people are making 50%
| more than others (seniority, better negotiating, etc.) then
| you'd rather lay off two of those employees than three people
| at more traditional pay. It's about budgets, not headcount.
| thewarrior wrote:
| Are managers and senior middle management more protected from
| being laid off ?
| throwaway7104 wrote:
| After reading last week's leaked YC letter to founders, I was
| suspecting that this would be a shockwave staggering the startup
| scene.
|
| I'm not working at Bolt, but this week our (not large) company
| has announced a 20% layoff and essentially made it clear that we
| shouldn't count on any investment funds in the foreseeable
| future.
|
| Hard times with all these investment sources drying up, but so
| far this crisis is localized to the tech world, unlike the dotcom
| bubble was. I sincerely hope that it will stay this way.
| kadomony wrote:
| Waiting for Ryan's tweet storm eagerly to see how blame is
| shifted to VC and Stripe.
| upupandup wrote:
| Thanks to him, lot of people in the industry are now a bit
| wiser and more careful while others simp for the establishment
| because they seek to benefit, are benefiting (maybe in the
| minds of some, they think they are reading this board and
| looking at profiles of users who simp or attack them?)
|
| When he outed YC, Sequoia Capital and New York Times, I felt
| uneasy because I knew there would be blowbacks.
| kodah wrote:
| I was on that thread, I have no idea what Bolt did at the
| time and I don't use Stripe.
|
| Ryan didn't even look at the timestamps for the posts he was
| referencing: https://news.ycombinator.com/item?id=30069359
| Everything else he said was pure speculation and story-
| telling.
|
| Anecdotally, most people on HN _hate_ the NYT; it should give
| you pause if even these people did not buy Ryan 's story-
| telling.
| Permit wrote:
| The only thing he "outed" was his inability to read
| timestamps:
| https://twitter.com/theryanking/status/1485784882173255680
|
| He claimed Stripe copied his blog post, but when you click
| the links you'll see that Stripe's post was submitted earlier
| than his! This was his big "WHO WANTS PROOF?" reveal. He does
| not walk away from this looking good.
| tuckerman wrote:
| Just in case others aren't familiar, dang shared an extremely
| detailed and respectful refutation of some of Ryan's
| accusations: https://news.ycombinator.com/item?id=30070287
|
| Edit: added "some of"
| 1270018080 wrote:
| Thanks to him, I think he's a little bit unstable. His rants
| are a out there for sure.
| 88840-8855 wrote:
| it should not be a surprise that hypergrowth companies face
| difficulties in current conditions.
|
| the layoffs will continue and hopefully contribute to a
| normalization of dev salaries.
|
| i find the crazy salaries that devs received in the last years
| obscene.
|
| edit: kids, stop down voting without comments. i have met too
| many arrogant software engineers, data scientists in the last few
| companies I've worked at. many entitled juniors, too many
| arrogant seniors. it changed my view of this field
| nso95 wrote:
| God forbid people be well paid
| gedy wrote:
| High salaries mean little if people have to self fund 20-30
| years of retirement and pay crazy prices to live near work.
| torbTurret wrote:
| The only arrogance in this thread is you calling others "kids"
| and demanding comments.
| blitz_skull wrote:
| Why do you find obscene?
| c7DJTLrn wrote:
| The wording of these always makes my skin crawl. Just say what's
| happening and what led to this decision. Numbers, not handwaivey
| rhetoric like "we need to focus".
| TomBombadildoze wrote:
| I tried to order a Solo Stove last fall. I placed the order, they
| accepted it, everything seemed like a normal e-commerce
| experience. _Two days_ later, I received an email saying my order
| had been canceled for suspected fraud. I 've never had that
| happen before, and it hasn't happened since. My experience is
| obviously anecdotal but their fraud detection routine clearly had
| major flaws.
|
| With news of layoffs at Bolt, I wonder how many partners lost
| sales like mine.
| honkycat wrote:
| Ugh. I have a bunch of money saved up but I am terrified this is
| going to be the great depression 2.
| Apocryphon wrote:
| Between them and Treehouse, hope no one tries to spin this to
| attack companies experimenting with the four-day workweek.
| staunch wrote:
| Generous severance is the ethical test of a CEO during a layoff.
| It softens the blow of a layoff immeasurably to provide 4-6
| months of severance.
|
| If a CEO won't do it, the remaining employees should question the
| CEOs ethics, and ask themselves how they will be treated in the
| future. And if the business literally can't afford to do it
| (which is rare), then everyone should question the CEO's
| competence.
|
| As customers, we should all do our best to avoid and boycott
| companies that do layoffs without providing generous severance.
| Because who wants to do business with an unethical or incompetent
| company.
|
| If anyone knows what severance Bolt is paying, let us know.
| fdgsdfogijq wrote:
| This company is probably going to go under. Huge severance is
| going to eat into their already short runway. Sometimes its
| just not there. And most of their engineers are highly capable,
| they will be fine. Its part of working for a high tech startup.
| bombcar wrote:
| And since they're trying to sell to companies, said companies
| will be less likely to make deals with them if they think
| they'll go under soon.
| break_the_bank wrote:
| Given the CEO suggested people buy the equity while taking
| personal loans in the last raise in February, I doubt the
| goodness of the severance.
| fdgsdfogijq wrote:
| Rumors going around on blind (posted by bolt employees) that over
| the course of a few rounds of layoffs it will be 30-50% of the
| total workforce. A lot of the initial layoff are software
| engineers. Apparently they only have 12-18 months of runway, and
| need to effectively double that. Current revenue is 40M.
|
| I guess this is the beginning of the tech washout. _clings to
| large tech company job_
|
| EDIT: 33% layoff today
| ushakov wrote:
| they raised $355M this year and like $600M last year
|
| https://www.crunchbase.com/organization/bolt-5/company_finan...
|
| how can a company burn money that quickly so they end up with
| only 12-18 months of runway?
| fdgsdfogijq wrote:
| No idea. Confirmed the layoff number is 33% as of today.
| Which is pretty aggressive, they must be hemorrhaging money.
| matwood wrote:
| I shaved a bit off our AWS bill and my CFO at the time asked
| if it was worth my time. I asked him if he knew how you get a
| huge AWS bill with no idea how to fix? A little bit at a
| time.
|
| People get lazy because things seem good and let questionable
| hires and other expenses slide by because why not, there's
| plenty of money.
| ushakov wrote:
| see, that's why we don't use AWS
| matwood wrote:
| Toosh!
| phphphphp wrote:
| very broad strokes: money is raised to be spent. each round
| gets you to the next, or you reach some measure of
| sustainability before the money runs out -- layoffs like this
| should be expected, regardless of the amount raised, if
| there's a shift in conditions that indicate raising again in
| 18 months isn't going to be easy. You can burn any amount of
| money if you want to.
| throway782 wrote:
| unicornmama wrote:
| Large technology companies won't hesitate to layoff employees
| to protect their stock price.
| aleksiy123 wrote:
| I'm genuinely curious. Is there any other options? By this
| point it's too late, right? And even if they played it safe
| there is always some risk.
| puranjay wrote:
| Remember that debt fuelled stock buybacks were a huge reason
| for propping up stock prices for these companies as well.
|
| Now that cheap debt is off the table, that buyback strategy
| will have diminishing impact as well, forcing companies to
| find other ways to keep stock up (such as cutting costs)
| colinmhayes wrote:
| I mean the established big tech companies are sitting on
| mountains of cash. I suspect they'll start ramping up
| buybacks even more aggressively due to what they see as
| undervalued equity.
| FooBarBizBazz wrote:
| I don't think VC-backed startups typically do stock
| buybacks? That's more of a Fortune 500 thing, AFAIK.
| "Startups" (of whatever size) are always concerned about
| the next funding round; I don't think they're going to burn
| runway to prop up the share price. It's companies like GE
| and IBM that do that, AFAIK.
| puranjay wrote:
| I was referring to the OP's comment that established
| publicly traded tech companies too will be under pressure
| to keep the stock price up and thus, aren't immune to
| layoffs
| schoolornot wrote:
| Or their bonuses.
| truthwhisperer wrote:
| nrmitchi wrote:
| 1) "Multiple rounds" is basically the worst possible way to do
| layoffs.
|
| 2) Based on their recent fundraise (and assuming that they had
| 0 dollars at that point), that's basically a burn rate of
| 25-30M/m. I'm not sure I can event comprehend what that company
| could be spending that much money on.
| urthor wrote:
| Agreed.
|
| The way to do layoffs is simple. You get managers to stack
| rank the lot, then you get every single person with 30 or
| more reports under them in a room.
|
| Then you do the whole layoff in one 5 hour meeting.
|
| Swing the axe and get it done in 2 days.
| halfdan wrote:
| Having 5000 employees will do that quickly.
| datalopers wrote:
| https://www.linkedin.com/company/bolt-com/
|
| While not everyone has a linkedin, 900 employees seems like
| a reasonably safe pre-layyoffs estimate?
| polote wrote:
| Among the 900 a lot of them are drivers at the Bolt
| delivery company (So not the same one)
| nrmitchi wrote:
| From what I'm seeing they had ~550 employees as of the
| beginning of this year (~4 months ago). This was up from
| ~270 in Sept 2021 (~4 months prior).
|
| I would find it very hard to believe they have increased
| their headcount by 900% (~4500 people) in 4 months.
| throwaabolt wrote:
| I am one of those let go today. It's especially bad, because they
| seem to have messed up the invite templates. I received one to
| the Town Hall meeting, even before Majus letter was published,
| only to get the invitation cancelled and receive and invitation
| to "Bolt Restructuring". What an emotional rollercoaster.
| Extremely anxious about the future, as this is my first time
| being laid off, especially in the current market.
|
| EDIT: I am doubly screwed because I signed up for the employee
| stock option loan program... and I'm not sure what the bank will
| want from me now that the stock price has tanked.
| DevToRecruiter wrote:
| I'm sorry you're going through this. I don't know what your
| position is but I may be able to help you with the "finding a
| new job" part of your anxiety. Please feel free to reach out to
| me on twitter @devetorecruiter. Good luck with everything!
| throwaabolt wrote:
| thank you. can my wife's boyfriend contact you too? he is
| part of the layoff as well.
| nso95 wrote:
| best of luck my friend
| sibeliuss wrote:
| I'm sorry to hear this. Did they offer severance pay?
| cr3ative wrote:
| Sorry to hear this, I hope everything works out for you.
| respondo2134 wrote:
| I work at Bold Commerce and we have some open positions for
| software devs; take a day or two to process and then take a
| look. I never realy figured out how so any companies were all
| going to "own federated checkout" and we are definitely in a
| different space, though a comparable size to Bolt.
| stu2b50 wrote:
| According to Ryan Brewslow,
|
| > There IS risk to the employee; they now have a real loan
| outstanding and 100% personal recourse, so if the common stock
| becomes less than exercise price, their personal assets are on
| the hook
|
| So I suppose the bank will be after your personal assets?
| phphphphp wrote:
| Can you share more about the stock option loan program? If it
| is what it sounds like, that program is unconscionable insanity
| and whoever is encouraging employees to engage with it is
| setting employees up for a world of hurt.
| fdgsdfogijq wrote:
| Half of the employees participated
| tehlike wrote:
| This has details
|
| https://twitter.com/theryanking/status/1493390167461224451
| bogomipz wrote:
| Wow. After reading this I clicked on CEO Ryan Breslow's
| Twitter profile pic and its him sitting in a yoga position
| with his palms up turned. Between this loan idea, the self-
| referencing to 4 day work and the yogi pose its like
| something out of HBO's "Silicon Valley."
| wavesounds wrote:
| Why didn't they just give them RSUs instead of doing this
| super complicated risky thing?
| stu2b50 wrote:
| More upside presumably, since if you do wait the time,
| and the stock isn't underwater, then you can sell and be
| taxed as long term capital gains.
|
| I really don't think that's a good gamble for an employee
| to take, but oh well.
| pastor_bob wrote:
| They still hiring though? Lots of positions listed. 4 day work
| week sounds tempting...
| datalopers wrote:
| Even better, word is once you've been there a while they'll
| move you to the 0-day work week.
| cheeze wrote:
| > I know this will be difficult for us all, so I want to provide
| clarity on what will happen next. For those directly impacted in
| the US and Canada, our goal is to inform you within the next 30
| minutes when you will receive a calendar invite for an individual
| or small sub-team "Bolt Restructuring" meeting. For those of you
| who are staying on the Bolt team, later this morning you will
| receive an invite to a Town Hall at 1pm PST. If you work outside
| of the US and Canada, we will provide further clarity based on
| the local laws and regulations over the next few weeks.
|
| I hate the use of things like "directly impacted" - feels like
| such corporate speak to try to lessen the blow. Just be straight
| about things. "Those who are being laid off" - don't hide behind
| words.
| aghilmort wrote:
| upupandup wrote:
| Spamming is NOT how you build trust/brand/customers
| dang wrote:
| Could you please stop using HN for promotion? You've been
| posting these links way too much, it's crossed into spamming,
| and we're getting complaints.
|
| https://news.ycombinator.com/newsguidelines.html
| nilsbunger wrote:
| This kind of message feels more authentic to me if you put the
| big news in the first sentence, then cover logistics, then add
| any context you want. Seems better than making people wade
| through a lot of stuff about securing financial position, market
| conditions, etc etc to learn if they are losing their job.
| 88913527 wrote:
| My guess is the author has little experience delivering
| challenging information.
| zucked wrote:
| I said the same thing earlier this week about Klarna's
| announcement. For those not in the know, it's called BLUF -
| https://hbr.org/2016/11/how-to-write-email-with-military-pre...
|
| Don't waste people's time by burying the most important
| information. You can receive a longform explanation, but not at
| the expense of comprehension or speed of delivery.
| aldebran wrote:
| Edit: I'm going to leave the below message but wanted to
| acknowledge that OP meant that the message could be more
| authentic. I misread.
|
| How is this authentic? I was reading through and thinking how
| it's mincing words and making it sound like everyone is going
| to feel the same pain.
|
| "This is one of the hardest messages I've ever had to send."
| Bad start. Why do CEOs make this about them? "Unfortunately,
| this includes reducing the size of our workforce and parting
| ways " "I know this will be difficult for us all" At least
| acknowledge that it's going to be more difficult for people who
| will lose their jobs. "But today, my focus is on our people. "
| You're literally laying people off. First paragraph literally
| puts employees as the last priority. "my top priority has been
| to do what's best for Bolt's business, customers, and
| employees"
|
| Stuff like this is business reality- just be really authentic.
| Say it sucks but we've had to do this. Don't talk about how
| hard it is for you or others who aren't directly impacted. It
| may be hard but it's way harder for the ones losing their jobs
| and cut the BS about focus being on people. It's clearly not.
| zucked wrote:
| You missed the takeaway of OP's message - OP is saying that
| the message, as it was broadcast, was not authentic because
| it was a long, meandering explanation, burying the part where
| people are losing their jobs in the last sentence of the
| third paragraph.
| aldebran wrote:
| I should read more closely. :)
|
| Thank you!
| HomeGear wrote:
| I think OP is saying, "This kind of message [would feel] more
| authentic to me..."
| eunos wrote:
| Wait this is not Bolt the ride-sharing company?
| daliusd wrote:
| Yes, it is not the same company. Ride-sharing is bolt.eu, this
| is bolt.com - some checkout company. bolt.eu is doing OK and
| got some investment recently.
| aabhay wrote:
| I called it ages ago -- this company is an utter train wreck. I
| am honestly ashamed of the entire industry for birthing and
| fostering this basically fraudulent company. Its mistakes and
| lies are compounding on themselves, creating awful outcomes for
| its employees:
|
| - Company almost certainly juiced its usage numbers, potentially
| by buying users to inflate its customers revenues, so it could
| use those numbers to convince new customers - Used a single deal
| with a large company (Forever 21) to sell VCs on the vision,
| while under the hood that deal was clearly failing - ex CEO
| picked twitter fights constantly, to the point of calling into
| question whether he was even capable of focusing on execution -
| Biggest competitor (Fast) exploded even before the market crash.
| - Offered employees a four day work week while claiming rapid
| exponential growth - Offered employees PERSONALLY guaranteed
| loans to help them exercise the options - Raised at $11B
| valuation with 100x forward revenue multiples. - Cash raised is
| currently 6-8x revenue multiple, meaning valuation over next 12m
| makes employee options worthless - I've never seen the technology
| used on any website, and I am a frequent online shopper.
|
| Real talk, is this fin-tech's latest Theranos?
| kumarm wrote:
| wouldn't Fast be the Theranos even by your description?
|
| Bolt definitely has some explaining todo with employee stock
| options but calling it Theranos seems little extreme.
| nrmitchi wrote:
| > I've never seen the technology used on any website, and I am
| a frequent online shopper.
|
| I went down this rabbit hole last month. While not directly
| related to the current topic, it might help explain why you've
| "never seen it":
| https://twitter.com/nrmitchi/status/1519174682863226880
| [deleted]
| tkiolp4 wrote:
| I just accepted an offer (contract is signed) 1 month ago. I
| guess I need to start again looking for a job.
| jdoliner wrote:
| Why would the YC mob do this to Bolt?
|
| (/s)
| flerchin wrote:
| Eric Andre on HN!
| dontreact wrote:
| So is this the competitor to Fast, which also had a big round of
| layoffs recently?
|
| My current understanding is that both of these businesses were
| premised on the end of Amazon's one-click checkout patent. Is
| this proving that to be a faulty premise?
| rsstack wrote:
| Fast didn't just do layoffs: Fast shut down completely.
| tootie wrote:
| Fast shut down completely.
| bombcar wrote:
| I have yet to understand how anything one click can beat
| something like Apple Pay for sites you don't have an account
| on.
| lupire wrote:
| The most important fact is buried on the middle of the third
| paragraph, because the CEO is a coward.
| mdoms wrote:
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