"With our culture of bringing our whole selves to work and seeing team as family, with shared values we live by,..."
In the American business world, you are an employee until you aren't. Confusing being an employee with being "family" is a mistake, both for the company and the employee.
When times get bad, companies do what it takes to survive, including throwing employees overboard. That's just a fact.
Buffer may have thought it was different, but that flow-chart of how they decided who to layoff was entirely about how an employee can help the company, not how the layoff would affect the employee. That's not how normal families make decisions.
I have no problem with any of that, but anyone who thinks that way has another thing coming.
All of this isn't to say that Buffer was thoughtless or callous in how they handled it. From the outside, it looks like one of the better handled layoffs I've seen.
But still. Don't confuse your job with your family. It's a business relationship that is only maintained as long as it is in both side's interest to do so.
> The key concept is summed up in the 23rd slide. “We’re a team, not a family,” it reads. “Netflix leaders hire, develop and cut smartly, so we have stars in every position.”
Your last sentence here is really important. If that's the mindset a person is in, when a business-centric action happens they won't feel as betrayed. Trust me, feeling betrayed while also fully logically knowing you shouldn't feel betrayed because it's a corporation in a capitalist ecoystem is such a bad feeling.
I agree the whole family thing is ridiculous. However, the performance focus of Netflix is probably too far on the other end and ridiculous too. People are not machines and performance will not always remain high. And also measurements of performance of people are often silly and useless. Performance will fluctuate and change with time. So a level a loyalty in the face of bad performance is still very advantageous even for businesses.
Some happy medium between family and performance oriented needs to be found.
The voting on your post implies people disagree, but the method you mention is the way the vast majority of companies try to operate because it intuitively makes sense.
Even in a cut-throat industry like sports, athletes aren't cut or traded the instant they enter a slump (if they still have future potential).
As mentioned below, Netflix has the philosophy "we're a professional sports team". Yet they don't pay people millions of dollars like an athlete. If you really want to be cut throat, great, pay people like an athlete then. Otherwise quit the BS.
They may not pay millions (as far as I know), but I've heard a senior engineer at Netflix can make upwards of $400k/year which is a lot relative to a similar position in other companies.
Some make far more than that. They pay 100% cash and let employees decide how much appetite for (equity) risk they want to take on. It's a refreshing model for those who've seen their significant equity stakes (on paper) become worthless, or those who prefer to know exactly what compensation they'll be getting upfront, etc.
Is your point that because an average software engineer makes 5-10x what a minor league baseball player makes, that a "major league" software engineer should also make 5-10x what an MLB player makes?
The original claim is that Netflix runs more like a professional sports team in terms of demanding performance. The argument against was that they don't pay like one.
My argument is that they pay somewhere between a minor and major league team, both of which have a "perform or get out" mentality.
Sports teams don't actually pay market rates. Every sport that I can think of limits pay in one way or another especially for stars, ostensibly so that small market teams can compete with big market teams.
In English and European club football (soccer) there are no salary caps.
"In English sport, there’s no draft; there’s no salary cap; there’s no revenue sharing, no parity. In the Premier League, it’s every team for themselves." [1]
Most professional athletes don't earn big money. Rather like music, a very few make it in the big leagues. Of the rest, some find steady work in minor teams; many, many others struggle to get by combining their passion with casual day jobs.
If your sport isn't one of the few that can command massive advertising dollars, then there may be no pay at all. The value chain is very clear: all high athlete salaries are ultimately funded by advertisers wanting access to consumer eyeballs.
Overlay all this with the very short effective career, the near-absence of post-athletic marketable skills, and the devastating effect of injuries, and you'll find athletes are statistically underpaid over their lifetimes.
I don't know for sure, but I don't think Netflix cuts people right away either. I am sure they are looking for future potential before making a rash decision. If not there would be hardly anyone left and I know several that people that have worked there for many years.
Five years later, McCord, her mentor, left. When I asked her why, she visibly flinched. She wouldn’t explain, but I learned later that Hastings had let her go.
McCord being the manager who instituted the aggressive cutting of employees that weren't good current fits for a position, which makes this somewhat ironic. Having an employee flinch when a prior employee's name is brought up seems like a major red flag to me. One of the negatives of aggressively removing people from positions like they do might be that many existing employees stress about their employment, possibly to an unhealthy degree. It sounds like sometimes there is little or no feedback as to performance before these removals.
We had a family like business run by my family for many years. It had a stable profitable business that allowed that though - it's harder in startup type companies. We eventually got bought by a US corp who fired everyone.
* Because performance vary with time (personal issues, motivation, etc.) so today's low performer may be tomorrow high performer
* Because your metrics might not be good enough to actually discriminate low performers from high performers
* Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company)
And probably other reasons.
So I have no problem with:
* Letting go people because the company has to reduce man count, and choices have to be made
* Letting go people because their behaviour is hurting the company
However I'm dubious about the idea that you should keep churning employees perceived as "low performers" to hire new ones who may or may not later reveal to be better.
Yep, the problem isn't deciding to keep low performers; it's that it's extremely difficult to identify them or separate them out from the performance of the system surrounding them.
This is basic Deming management wisdom: most of the overall performance of your company comes from the system and environment surrounding individuals, including the individuals themselves. Optimize the whole, not the parts; focusing on individual performance is just a distraction that drives overall performance down the drain.
> * Because your metrics might not be good enough to actually discriminate low performers from high performers
I think this is very true. For many complex roles you land-up with all sorts of indirection to create 'metrics' which are often some input with a lot of opinion. I've seen lots of situations where you look through performance review data to see employee ratings bouncing all over the place as they (or whole teams) shift from manager to manager. That's not to imply that managers are negligent, it's just that in many roles it's perfectly possible to have a different view of performance (and everything else).
> * Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company)
See stack ranking!
The other issue is that an organisation can develop a reputation for being too fast to pull the trigger which can impact retaining talent and hiring new people. Given that metrics aren't clear, every 'low performer' situation involves friends and colleagues who don't think that the individual was a low performer. Plus the person leaving is unlikely to be positive about the organisation whatever the compensation is.
That may be fine from a management philosophy perspective, some people think it's good as "only poor or average performers will worry".
If someone is always a low performer that makes sense, but the Netflix question is what do you do with people who have been good performers but aren't at the moment. Netflix philosophy is that you cut those people ruthlessly.
Here are some problems with that: A lack of loyalty to your employees can have a corrosive effect on morale. Employees can end up having very short term goals, or manage their careers in ways that they try to keep themselves in advantageous positions rather than the ones that serve the company. Why should a star take on a risky project, if failure results in termination? Firing can also be a lazy way to deal with a variety of management problems.
I actually think this is important. Working with an asshole is a big problem, and I fully admire leaders who know when it's time to let someone go because the situation cannot improve. It certainly beats working in a caustic environment because people are afraid to fire someone.
Wasn't Netflix referring to cutting people when they became idle?
Their whole motto is "we're a professional sports team" so if you can't play ball (or there's no longer a ball for you to play with) then you're cut from the team. This was different from the family viewpoint where a company takes an employee and tries to grow them or find new work for them.
They're not really referring to "culture" fit, team compatibility, or even cutting assholes, just whether or not you can provide value to Netflix at that moment.
The problem I have with pro sports analogies is that productivity is much easier to quantify and track in sports than most businesses.
One usually must spend a decent amount of time/energy tracking and making the case for their own productivity, which of course, lowers their actual productivity.
alas, usually in cutting environments like this the caustic assholes are the ones who stay and the ones who haven't presented their output in the best way are the ones who will be cut.
Of course people have to be smart about cutting, and things are not going to go right if the leaders are themselves unable to identify actual negative net influencers.
But in my own experience, I've worked at one specific place that was very very good about identifying people who plainly didn't help and letting them go. It helped immensely over time: the culture was really good (people were really invested in their job, and loved working as a team) and the retention rate was about 6x higher than most places in the same field.
They didn't use bogus metrics or anything, it was always a "feeling" kind of thing. If several people said someone was not helping, they were most likely right. It was arbitrary I admit, but rarely wrong.
You're assuming that you have to be an asshole to get/make your results noticed. And yes, those who sit in a corner doing stuff nobody cares about will be fired, and rightfully so.
I think the implication was that those who sit in a corner doing stuff fundamental to the company's success, who don't present themselves well to the decision makers, will still get cut.
There's plenty of agreement with you, so I'll offer a counterpoint.
When a company is small--less than 10 or 20 people--it really can feel like a 'family' in that everyone would rather see the company fail than break apart. "Layoffs" aren't realistic in such an environment; the company is either working or it isn't.
As a company grows, these rules necessarily change. It's just a fact of having more people, as the momentum of the company becomes bigger than any individual. It's part of how a company grows. I've watched it happen; it's a strange thing and it feels like something has been lost, no matter how necessary it is.
The change from a tight-knit team, battling for success against all odds, to a sizable company with growth curves, finances, lawyers, outlooks, audits and EBITDA can sneak up on you. I think it would especially surprise early employees and founders, who remember the days when it didn't feel like a company at all.
Employment is never quite 'family'. But there's reasons to be empathetic to these founders' mistakes and choice of words, rather than a blanket "anyone who thinks that way has another thing coming."
Judging by the downvotes, it looks like your comment is controversial.
I actually agree with you. In a relationship we trade constantly, something for something else: love for love, company for company, or any combination. They are like constant bi-directional streams.
As long as both parties are happy with what they receive and give, they will maintain the relationship; when that's not the case, well, that's when we get divorces, friendships destroyed, etc.
Yes, blood relationships are somewhat special, but if for instance you permanently severe the relationship with your kids, even though you can still claim they are your kids, I don't think is any different than not having kids at all.
However, if you factor in the fact that humans are emotional and highly unpredictable by nature, you'll quickly realize that constantly applying strategies from the business world to your personal relationships will quickly blow up in your face.
Flexibility and balance in how you approach things are key.
I appreciate the comment. If downvotes facilitate thoughtful discussion and inquiry, I'm cool with them.
I don't know if I see much of a difference between strategies that work in business, as against strategies that lead to successful, long-term relationships.
If you're in a job where your manager ignores you, rebuffs your efforts for honesty in your communications, and generally treats you poorly, should you maintain that relationship, or break it off?
Is it any different outside of work? If you have a partner who cheats on you, or is sarcastic all the time, or is indifferent to you, I'd say that's another relationship that should be broken off, if it's clear that it cannot be saved.
I agree with flexibility and balance. I also believe in gently confronting people who treat others poorly, trying to correct the situation if possible, and if it cannot, then disengaging.
At 56 years of age, I've come to realize that I do not have infinite time to waste on less-than-strong relationships.
I concur with your line of reasoning in your examples.
I was not arguing against applying such strategies, I was merely suggesting we shouldn't always use them – to make room for flexibility – as I was trying to avoid claiming complete equivalence between the business and personal sides.
I recommend thinking carefully about what is to your long-term self-interest, and then acting accordingly.
That would include not creating children if you and your partner are not certain that you want them and will do what is required to raise them in a peaceful, loving and rational home.
So, I think children should be disturbing the peace, and perhaps frequently. I see children as being engaged in absolutely critical work, which is trying to build up a set of abstractions, or concepts, that will allow them to succeed in the world as adults.
To do this, I think they have to do lots and lots of experiments. It may look like horsing around to us, but I don't think it is.
As regards being loving, I'd say a couple of things. First, I think children have a natural sense for justice. A child that is treated justly will, over time, learn to treat others justly. Too often, though, I'm not sure that the parents have an entirely firm grip on what justice is, though, and so they might act unjustly towards their children, and then be angry when the child doesn't act in a loving manner towards them.
As regards being irrational, I'd say that that is also sort of the expected-state for someone who is still developing. I don't think all parts of the brain (e.g., the pre-frontal cortex) is fully developed until about age 24 or so. I would also say, again, that one would want to look at what the parents are doing. Maybe they are treating the child in an irrational way, which I think is going to cause them to receive a response that, in their different frame of reference, seems "irrational."
I'm not sure I understand the dichotomy between being loving and rational at the same time. In my view, a rational person is a loving person, rather than an emotionless character like Mr. Spock from Star Trek.
What happens when a child is psychotic or has a chronic health condition that causes them to struggle to communicate or 'give back' to their family in a way the family can understand? What happens if the child becomes suddenly ill, or is accused ofa crime that will take a lot of money to resolve? I feel that family is hard to view add a business transaction because there are these edge cases.
> What happens when a child is psychotic or has a chronic health condition that causes them to struggle to communicate or 'give back' to their family in a way the family can understand?
Sometimes what the family gets out of it is a sense of moral correctness, and self assurance that what they are doing is correct. People use cost benefit analyses for everything, it's just that we often don't take into account some aspects (such as how we feel about an action,or how it affects our self image) when trying to rationally weigh those costs and benefits mentally.
If cutting off ties with your child makes you feel extremely guilty or like a horrible person, to the degree where you can't stand it, then obviously you weren't correctly weighing the impact that action would have on you.
Note, in the case of children, it's a bit more complicated, because IMO you've essentially contractually obligated yourself to your child for at least 18 years, but generally for much longer. By bringing that person into the world, you bear some of the responsibility for their outcome. Often this doesn't feel much like responsibility because our strong emotional connection and need to protect and help subsumes it, but if those are removed, responsibility does remain.
I do have some experience with parenting. I have three children, in their 20s and 30s at this time. All are doing very well, and we are all on good terms with each other.
With respect, I think our different views may be the result of a different understanding of what it means to truly be self-interested. In my view, it's nothing like being a greedy bastard who only cares about sacrificing other people to himself, being a manipulator, being miserly, etc.
How many times do I have to get annoyed at my kid for waking up in the middle of the night before you're OK with me kicking him out of the house? Keep in mind that he is currently 11 months old...
I'm unclear as to whether this was meant to be sarcastic or not.
My point is this: Children have a certain nature; part of being a child is development of the ability to regulate one's emotions. Loving, thoughtful parents will (hopefully) learn about such things, such as Dr. Porges "Polyvagal Theory" and then be able to help their children with this process.
I am not suggesting that people should abandon important relationships on a whim. I apologize if I was unclear on this.
No sarcasm at all. Child abandonment is clearly bad for the child and can see the parent thrown in jail.
Adoption is the better choice for both parties.
I think you perhaps missed the broader point though.
If you're raising children as servants to take care of you when you're old, then yes, self-interest is a good reason to keep them around. They will also likely act in their own self-interest and ditch you.
Otherwise, raising a child requires a great deal of self-sacrifice with absolutely no guarantee that you'll even get the satisfaction of a job well done. It's a total crap shoot and even the emotional return on your investment is likely to be poor.
Acting only in your own self-interest is a good way to stay single and childless though. At least you'd have plenty of time to read Ayn Rand.
You and I seem to be having a good conversation. Thank you for that.
I don't think raising my children to take care of me when I'm old (should be any day now) would be acting in my self-interest. In fact, I think it would be acting against my self-interest.
A better model, I think, is for me to do all that I can to be self-sufficient, and not predatory in nature, in terms of expecting other people to care for me.
As long as I can find pleasure in life and activities that interest me, like hacking in Lisp, or re-learning how to weld, or reading about philosophy, I'd like to go on living.
When there are no longer reasonable things for me to pursue, then it's time to go. I certainly don't expect my children to do anything more for me than they freely wish to do.
Children are not born to be servants to their parents, as you observe. That's why I think it's incumbent on parents to treat their children as best as they possibly can, since children come into a family without being able to consent, and since children are essentially powerless to leave a family that treats them poorly, until they reach some age where they can be self-sufficient.
With interest rates at 0.25% and the Fed talking about doubting whether they should go down or up, I hope you're not thinking that a pension fund will take care of you when you're old. That won't happen. With interest rates under inflation, you are in fact losing spending power (that is of course the point of the policy: incentivize people to spend now, not save to accelerate the economy). Pension funds are failing because of Fed policy [1], and the current elderly are plundering them dry for the same reason you defend children. They have a right to a pension [2]. Given that stocks have now also refused to go up further (since January SP500 has only gone down. Granted, they came back up to about 2100, but there is negative return so far for the year. How negative varies quite a bit from day to day, but may God help retirees if they drop from here and stay down).
The model where Children take care of elderly is coming back, unless the Fed and the ECB stop acting like we're in the midst of a deep recession.
> Children are not born to be servants to their parents, as you observe. That's why I think it's incumbent on parents to treat their children as best as they possibly can, since children come into a family without being able to consent,
And if the alternative is to starve to death a year or two after you no longer have the ability to work ? What if the alternative is merely to live in poverty when you stop working ? Do people have the right to not live in complete poverty ? I'd say yes. What if there is no choice but to "use" children to accomplish that, like we did for 90%+ of history ?
That second one seems to be happening to plenty of elderly today, and they had far, far better circumstances to avoid it than you or I do today.
I'm not even saying that this is moral, or that it is what you have to do. I'm saying it's what's going to happen if present circumstances remain.
> Otherwise, raising a child requires a great deal of self-sacrifice with absolutely no guarantee that you'll even get the satisfaction of a job well done. It's a total crap shoot and even the emotional return on your investment is likely to be poor.
Interesting. Although there is self-sacrifice, for myself, I see it more as a privileged to bring up another human being. As much sacrifice as I've given, I've gotten back. Being a parent has made me really consider my own actions - do I act in accordance with my moral code? do I actually present the example I want to set or am I hypocritical? How can I create safe boundaries for the child so they can explore and become themselves? There are so many things being a parent can teach you. The questions that children come up with out of curiosity.....sometimes just floor me completely. Then there's the cuddles and hugs which just melt your heart :)
I don't know about self-interest - I think here it really is down to what you think self-interest is. Which I think starts to touch on what each person believes their life is for. Anyway, just some random thoughts.
How many times do you put up with your kid beating up his mother when he comes home drunk in the middle of the night before you require him to move out of the house? Keep in mind that his is 15 years old...
As parents, we tend to believe that we will always love our kids in a way that allows us to maintain healthy functioning relationship with them no matter what happens.
But when you see what can go wrong in families and how 1 member's behaviours can have a massive detrimental impact on the other members, you realise that there are limits to that.
While I will always love my kids, I know, objectively, that there are circumstances that could force me to fundamentally alter the terms of my relationship with them. I pray that never happens, but I know it's possible.
Similarly, I know plenty of people who no longer have any relationship with one or both of their parents due to the way they were treated as kids. Society (rightly) tends to be more accepting of a child who decides to sever their relationship with an unloving parent than the reverse.
My wife is a former welfare case worker. The scenario I painted is quite real, but if it is so far removed from your reality that it seems ludicrous then that says good things about your family life.
Best advice ever right there - our sanity was saved on several occasions by friends offering to look after our child for a night when he was small and not sleeping.
Perhaps true, in a real super rational techy view of the world, as long as by long term you mean the entire life of all the family members.
But not a particularly useful observation, just as the concept that "giving to charity is an act of selfishness, since people only only do it to feel better about themselves" might be true but is not useful.
Not even, you know that some families aren't so functional and actually very destructive. Children and parents "break up" all the time. Ask anyone who is LGBT for example (especially older and trans).
Also many families have that "one uncle" (or whatever) who is somewhat estranged and isn't invited to stuff.
All without a "super rational techy" view of the world.
I try to live my life as an empiricist. I didn't choose the family that I was born into. If my family treats me poorly, abuses me, etc., then bailing out on them makes sense.
In the same way, if someone in your life never shows curiosity or empathy towards you, you should probably leave the relationship.
I really appreciate your further comments. I agree for most part that humans and other living things ultimately act out of self-interest.
However, there are circumstances when rationale breaks, like when member of your family develops a terminal decease. A purely rational decision would be to cut emotional and financial losses and abandon them, wouldn't it? Yet, luckily, we don't see that happen.
The length to which we go to keep family relationships is irrational, yet I suspect it's a huge component of how we managed to ensure reliance of a system and develop huge societies.
is it lucky? especially in the west, we'll fight a terminal disease long past the inevitable, at the expense of the patients well being. at some point the humane thing to do IS to "abandon" them.
I'm glad you're enjoying this discussion. I'm enjoying it as well.
My view is a little different.
I don't think abandoning someone who has been a great value to me because they have developed a terminal disease would be consistent with acting in my self-interest. To do such a thing would be to betray the virtues that I hold dear, such as honesty, integrity, justice, pride, etc.
For example, consider honesty. If this person was a great value to me, we would have some kind of understanding that we don't just toss each other overboard in tough times. If they get sick and I do toss them overboard, I would be a liar, and that brings a ton of other negatives with it, such as undercutting my personal integrity.
There's also the issue of justice. If this person has treated me well, if we have fallen in love, would it be just to abandon them when they are in the fight of their life? That sounds like injustice to me, unless there was some kind of (weird) agreement covering this situation.
This reply is getting a bit long, so I'll stop here.
If I haven't explained this very well, please say so and I'll try to be clearer.
The thing is, once you find that the logic of how you decide what to do includes good actions being conditional on being virtuous, it becomes clear that the part about self interest is not essential, and your logic would be clearer if you refactored it to remove that.
<The blow was softened by my getting a ridiculous severance package–all my vacation days paid out in cash before I walked out the door that day, plus six weeks of severance pay...>
But as it turns out, that was two weeks of severance plus the bonus he had already earned implemented as four weeks of extra severance.
I agree 100%. I've worked for multiple companies that say "we're a family", then lay off people with no warning or remorse. Businesses are not families.
And businesses are cutthroat capitalists when it benefits them.
All that family nonsense is just to talk employees out of looking after their own interests.
Your relationship with your employer is inherently antagonistic, and anyone who tells you otherwise is selling you some BS. That doesn't mean you can't work well together, but sometimes your interests align with the company, and sometimes they don't.
Well there are degrees to this. Buffer seemed to want not having to fire people, but made a mistake.
You can compare this to big game companies, which have no problem hiring a bunch of people and then laying them off when the project is done. All the disadvantages of being an employee (IP assignment for side projects, low pay) with all the disadvantages of being a contractor (no income stability).
Companies do what they need to in order to survive, but that doesn't mean that the people running the companies are always 100% soul-less
I'm pretty sure founders at Buffer feeling real bad about firing folks doesn't make the experience any better for the fired folks. Three to six weeks of severance is a tight turnaround to get a new job, particularly for non-engineering employees or remote employees. And, guessing based on their ramp-up and lifo scheme, they're probably firing some employees inside their first 6 mos. ie they most likely recently left a job for Buffer. I understand there's no promise of lifetime employment, but that's a serious dick move.
This is one of those situations where having worked a retail job in your life can really impart some wisdom into you. Retailers often give their minimum-wage grunts this song and dance about "family" and "performance tiers" and all that- and the grunts will tell you that it takes a couple years for some people to internalize that it's all a scam to make you work harder for minimum wage.
Your employer will not take care of you. It is your job as an employee to make sure they meet you halfway.
Notably, handing out options does not fix this. All it does is give employees conflicting interests, which softens (but doesn't alter) the blow if there comes a moment that firing them is the best thing for their options.
From my perspective, it's not so much the "warning or remorse" (or lack thereof) as the fact that the company _will_ do it.
The Buffer guys clearly feel remorse, and wish they had better sense about warning. They regret that the layoffs are necessary.
But they are still doing it--which they should--its the people (including themselves) who deceived themselves about the relationship they have with the company that are in trouble.
Not only is it not cynical, but should be taught to every college student, regardless of major and specialization in their general business elective class.
There is very little overlap between a family (or even a friendship) and a business (unless the business is mandated by law to provide benefits similar to what a family does - which it usually isn't)
Companies want you to be family so you can give more. In a family system, the family tends to fend and tolerate dysfunctional members. Usually it's the company that is the black ship and everyone tolerates and busts their ass carrying the company. Once things get tough, the family analogy gets thrown out the window and it's all business.
And, don't confuse your family with your job. Family relationships ("better/worse, richer/poorer, sickness/health") are unbreakable, by original intention at any rate.
Job relationships ("voluntary, subject to termination by you or company at will, for any reason or none, with or without notice, at any time") are not even close to family relationships.
Until we get job-divorce judges like we have family court judges, with the power to divide assets, the idea that a workplace is a family is wishful thinking, at best.
Family and community and culture happen organically so long as we are all humans. The company is what is structural and functional, with its existence depending solely on the performance of its functions. The problem is that the structure that gives rise to these functions are real humans. That is why restructuring implies firing people.
In the beginning the rewards from the human elements are far greater than the performance of the company. It could even be all you've got. You could have no profits, be in stealth, just prototyping, etc. Here the company could just be a promise written on a napkin or a handshake between founders. It could dissolve any minute.
Eventually though, once the company grows to the point where it hires people and makes money and pays taxes, the value of the company begins to far outweigh that of any individual member, or of any organic human elements that tends to adjust themselves anyway. This is when the company you founded might turn around and fire you. But congratulations, that's also when you know you've (sort of) made it...
The takeaways is to know your function. So long as you do, you should be able to predict if you belong. And if you know you don't, you should expect to be let off, knowing only that the people running the company are doing their job correctly.
An option isn't equity. It is, by tautology, an option to purchase equity.
By and large, options are just a symbolic gesture. I'm sure there are some people who've reaped a bounty from them... but it's exceeding rare, and even if everything goes right they still require a liquidity event that isn't guaranteed to include you.
The first couple of times I got stock options, I exercised them... and ended up using them as a tax write-off later when they became worthless. Now, I sit on them like an old comic book that might become valuable someday... and wouldn't think twice about letting them disappear if I change jobs.
An option isn't equity, but I would wager that a lot of people who subscribe to the "if I have equity I'm family" model are naive enough to not know that.
I definitely agree with your attitude on them, I really wish startup culture didn't frown upon electing to receive higher salary and no equity.
The shares are yours, but the company reserves the right to buy them back at the lower of the current price and price you paid for them, which it does when you leave.
Why are you saying something like it is always true when it is only true given a certain clause is present? It says right in your link that that's only possible when your employment contract says it's possible. Seems dishonest of you.
I never saw anything like this when I worked at an early stage startup, and it's obviously something an employee who reads their employment agreement would ask to be taken out. I'd never work at a company with that clause.
This is necessary for stock options to work properly. The whole point is to make sure people want to stay and make a profitable company, not that they ditch the instant the stock passes some threshold.
On the other hand, this can lead to disaffected employees who are only staying with the job because they are waiting for their options to mature.
so, the way stock options work properly is that you can work to build a company, and if management blows the revenue, or fires you a month before exit, you get nothing of value out of it?
Most stock options expire within a few months after separation. And, if the present valuation is high, the one separated will have to come up with the cash to buy the options and pay the alternative minimum tax. If the company is private and uncooperative, they can sometimes effectively prevent you from exercising your vested options.
If they have a call option on your stock (read your agreement), they're still not "yours". And it's for a private company you have no control over and probably no anti-dilution clauses on either.
"Buffer may have thought it was different, but that flow-chart of how they decided who to layoff was entirely about how an employee can help the company, not how the layoff would affect the employee."
I read that chart differently, they are retaining their longest tenure staff in each area without regard for ability. Seems a lot more "family" like to me.
So how do you account for companies like ours when, during hard times the CEO and CTO took no pay for two months so that they could continue paying employees?
Or by offering employees the same class of stock as the founders with the same voting rights etc...?
Two whole months (rolls eyes)? You think they did because of a sense of "family"? Maybe they didn't want employees leaving in this labor market and I'm guessing they didn't want to lay people off because others would take that as a signal to jump ship. Trust me, if things get bad, they'll let people go. Two months is not really bad.
It was a sacrifice for themselves and their equity. What does the cap table look like? Not laying off employees prevents a morale issue and gives more resources to keep building product. Don’t confuse other employees by trying to say it was a sacrifice for them, that is misleading, it wasn’t, but I’m sure the founders would love to sell it that way: “We’re doing this for you!”
It depends on whether you needed those employees for the company's survival, or you kept them on doing under-productive work worth less than their pay.
Founders effectively have the same class of stock as employees when it comes to value, except for voting rights. Voting rights are usually sensitive, because the new normal is for founders to have a different class stock upon going public to preserve their ability to control the decision-making process, even in the face of an activist shareholder.
You actually want your founders to have these voting rights typically. Most activist shareholders tend to say things like "your business would be a lot more profitable without this expensive engineering team. You don't need A players to maintain the technology you've already built, you should fire most of your team and outsource them." Suddenly preserving founder control sounds a lot better, eh?
I mean it's nice optics, but the salary of the person with the most equity is pretty meaningless overall. If the company works out that person is never going to notice the missing paychecks, if the company doesn't work out everyone still loses their jobs. It's business, not family.
> "With our culture of bringing our whole selves to work and seeing team as family, with shared values we live by,..."
This is total BS that employers might say to employees but either people will be foolish to believe so.
In India I worked for a large company that indeed operated like family. The company avoided layoffs by cutting salary of high performing employees to retain non-performers. Promotions were based only on number of years of service and not ability etc. But that is why I left for USA.
Employers should not feel ashamed to lay off people. It is not the case that people cant find other jobs. In fact being honest and transparent about it can help people find other better jobs. Similarly employees must leave the company at the first sight of the distress and go for greener pastures.
"Employers should not feel ashamed to lay off people."
On the contrary, they absolutely should. It means they failed. Management should be punished for letting it get to that point, not rewarded for doing it as they often are.
Failed at what? The feedback loop between investment and return is extremely long in companies, and it is almost always impossible to tell if you're overshooting (until its too late.) And slowing down does not work at startups, especially in hugely competitive markets.
Some businesses are cyclical, and we really don't have a more formal setup for employees that are only needed for 2-3 years of a 5 year business cycle.
I think it would have been a better decision to lay off 3-4 more people and let the remaining employees keep their perks and annual salary increase. 3% doesn't keep up with inflation. Maybe make that 4-5 people and create an incentive fund for those who kick some ass and help the company fight its way back from its mistakes.
3% absolutely does keep up with inflation[1][2] (whether it adequately compensates for increased experience as well is another matter).
The last 10 years US inflation was 3.2,2.9,3.8,-0.4 1.6,3.2,2.1,1.5,1.6,0.1 according to the world bank[2]. Giving the US an average inflation rate of just 1.96%.
Those may be inflation figures given my the government, but real life has real inflation -- like things that are not counted in the world bank inflation period. Could of questions to think about:
- In real life, how much has your rent gone up by?
- In real life, how much have your medical premiums and co-pays increased?
- In real life, how much have your drug co-pays gone up?
<2%, 0%, and 0% respectively (annualized). You have to recognize that the inflation figures are a national average - of course there are a lot of people experiencing more inflation than that, just like there are a lot experiencing less.
That might have been the plan to profit from that announcement to get rid of the perks. In the long run, if your company keeps growing in size, the perks might hurt.
I have a feeling their blog post in a year from now is going to be about how Buffer worked its way through a bunch of employee churn and training new hires, and how growth suffered. I think the outcome from some extra layoffs and foregoing the pay cut would be a post about how employees enjoyed high morale and rallied Buffer back into growth. And how sacrifices by the founders while maintaining pay and benefits through a tough time generated high employee loyalty.
Very good point - you are only "family" during the good times and so not really family at all. I don't think that "being an employee until you aren't" is an American-specific thing but perhaps the selective conflating of "family" with work colleagues is.
I don't think it's cynical at all, I think a lot of how people view their job has to do with their evolution as an employee. If you fall in love with the mission, like the people you work with, it's easy to conflate family and work. You spend 8+ hours a day with these folks and the people you work with most likely care about you as much as you care about them.
The reality is that it's still business and decisions are made with the numbers in mind, especially when things get rough.
> Buffer may have thought it was different, but that flow-chart of how they decided who to layoff was entirely about how an employee can help the company
To be fair, this is not quite correct. The flow chart shows they fired the most recent people in redundant roles. Not the "worst" performing (what I guess Netflix would have done) or highest salaried. Giving seniority the benefit of the doubt, instead of only using unemotional cost/benefits analysis, is rewarding loyalty and is protecting "the tribe".
Spot on. The same is true in the UK. I've liked a lot of my colleagues over the years, and still count a fair few as friends, but the idea of a business being "family"? No way.
Working for a company is a transaction, plain and simple, unless of course it's your company. That obviously changes things, because you'll inevitably be more invested in it - including emotionally.
Learned the hard way by a man with powerful emotions.
>In the American business world, you are an employee until you aren't. Confusing being an employee with being "family" is a mistake, both for the company and the employee.
I would say this is just a common philosophy for successful businesses. A happy family is a wonderful unit, but that happiness depends on giving preferential treatment to the least rational people. Which is a bad business philosophy.
True, an employer-employee relationship is very different from family relationships.
However, I would have really appreciated this level of detail and transparency when I was laid off. I think the first thing the person who called me to lay me off said over the phone was "So you probably know why I'm calling."
Uh, no, yes? Is this supposed to be a guessing game?
"With our culture of bringing our whole selves to work and seeing team as family, with shared values we live by,..."
It's moronic drivel, isn't it. Apart from being nonsensical (how can you bring less than your whole self to work, unless you've had some sort of psychotic breakdown) and the poor English ("seeing team as family") it just reads like corporate babble. It's not a family. I care about my family. I don't care about my job, its stakeholders, its values, its products or its customers. It's just a job. I'm a wage slave so I do it for the money and for no other reason at all. Whenever I see a company stating their values I immediately lose any respect I might have had for them. It's as if they've been on a fact finding trip to north Korea.
That's the way you see it, and to a certain extent I feel the same way. But two things:
Even with unabashed cynicism there's no denying that structuring a company like a cult has a huge advantage in terms of retention, dedication, salary requirements, etc. This dovetails perfectly with SV's youth worship because young people are more likely to buy into this crap, and they are also more likely to be willing to conflate their work and social circles.
Somewhat more charitably, not all companies are the same. Given the choice I would prefer to work for Apple than for Facebook because I think the former is generally doing better things for the world than the latter. On a more extreme level, I would definitely consider taking a lower salary from a company or non-profit I felt was doing really good things in the world. The point is, while "we are a family" is straight bullshit, the values of a company should matter. If I were to treat my employment as a purely mercenary transaction with no regards to anything but the transaction then I would be complicit in furthering the global corporate hegemony which unbridled capitalism is leading us toward.
I agree with you. I have other reasons why I do the job I do, but would never do it if the money wasn't there. At the end of the day, the feel-good nonsense has no place in business decisions, and that really goes both ways in an employer/employee situation. You can like your job, even love it, but if you're not looking at it as a business transaction you will get screwed one way or another. Replay job and it for employee and them, and the same holds for the business. It's a mindset thing, and has everything to do with professionalism and nothing to do with touchy feel goodness. Polite but firm negotiations where both parties feel good with the outcome can be achieved no matter whether you like each other or not. (Although the friction may vary along that axis.)
> I don't care about my job, its stakeholders, its values, its products or its customers. It's just a job. I'm a wage slave so I do it for the money and for no other reason at all.
I guess that's what a decade of bad management and shitty start-up/big-corp work does to you. Personally, I'm happy that some people have an optimistic enough view of "the work" to want to change that reality, and make it a positive and good experience when enough money is involved to do so. If you read more into Buffer you will see that it is indeed not your typical company.
> how can you bring less than your whole self to work
This means basically wanting to be somewhere else rather than at work. i.e., their culture is one of being dedicated to work when you're at work; at least that's how I understand it.
> poor English
This is not uncommon colloquial English. “Team” and “family” here act roughly like “mind” does in the term “theory of mind”—basically nonspecific nouns.
> I don't care about my job…
Sounds like you are a poor fit for the culture they are trying to build. Presumably you would not enjoy working there. That does not make their concept of how to manage their company moronic, nor an explanation of it drivel, however.
Your comment is blazingly condescending toward a post that is clearly very well thought-out and considered, based solely on your disagreement with Buffer's approach to organizing their team and company. That seems wholly unnecessary, particularly since you present zero actual evidence of Buffer's approach being objectively worse, just your opinion that it is.
I just posted my opinion on an aspect of the post. (I don't care about down votes; if I could hide my scores I would.)
I don't need to know anything about a companies culture to know what they're saying is patently specious nonsense. You might be impressed by it, who knows. Do you read a company's mission statement when considering a job and say "company a say they're honest and driven by a desire to put both their employees and their customers first, but company b claims integrity and a desire to raise the standard of customer service to a new level.....oh I just can't decide!"?
When you pile up phrases like "moronic drivel" and "patently specious nonsense", you're tipping onto the wrong side of the HN guideline which asks you not to call names in arguments. It's fine to make an argument against mixing work and family values; others have done so in this thread. It's not so fine, though, to do shrill denunciation in HN comments. That's good for stirring up indignation, if that's your thing, but it's bad for casual conversation, which is our thing.
100% agree. I may be friends with my boss or others but the professional relationship is completely business. I don't expect that to help me out if there are cuts to be made or if I am underperforming, etc.
The most money I ever made was with a group of fellow startup friends, who I considered my family. Being a career warrior might work for you, but that idea worked for us.
But what would you have done if one of those friends had stopped coming to the office. Or just did bad work. Would you have let them stay on forever or would you eventually have fired them? That's the difference between family and a team.
While I agree with your points, I think the ongoing assumption we can effectively emulate the emotional response of the ones who are actually are affected is starting to really get in the way. The expectation humanity can eliminate all suffering is unreasonable. That expectation is, in my humble option, an inefficiency driven by unreasonable sympathy. When I say "unreasonable" I mean laying blame where it isn't ours to lay. Consider the cost of unbounded empathy.
The Internet, and systems we are building, contributed to the unbounding.
Now the employees...they have a right to feel whatever they want about all this. They are the ones experiencing this, as you so well point out.
>In short, this was all caused by the fact that we grew the team too big, too fast. We thought we were being mindful about balancing the pace of our hiring with our revenue growth. We weren’t.
>Reflecting on it now, I see a lot of ego and pride reflected in that team size number.
> In many areas, we grew the team more than was truly necessary for the time, more than was clearly validated.
I feel like we all experience this pull by vanity metrics, ego, etc. The level of honestly we've seen in this post will hopefully serve as a reality check for many of us.
>Both Leo and I have taken a salary cut of 40% until at least the end of the year. Savings: $94,000.
>Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000.
This is an attitude and decision I saw made by the C-level during the financial crisis at a company with hundreds of employees. The C level took home $0 in pay and the staff took at 40% until they made it back to profitability, in order to avoid laying anyone off (this is Japan where reemployment would be incredibly difficult).
It shows maturity and commitment to the organization (i.e. your people) that is rarely seen these days in startup land. Much respect.
Was just going to post at a higher level, but your comment nails it. These guys are feeling the pain. It's clear. There is honesty going on here - I feel a lack of cynicism from the post, real soul searching, and for that, I can mitigate the otherwise knee-jerk negativity to the managers that I usually feel on layoff justification posts. Reality is hitting people. The market is slowing. Tough choices. No forgiveness for not having seen it, and for hurting the laid off people, but at least I see a genuine search for reasons and genuine empathy. Good post, under the circumstances.
Here's hoping that the wisdom on display will serve this company well.
1) They planned to spend 1/3 of their remaining cash on flying people around the world to meet f2f. Whoah! They need a CFO with some real power, because that is absurd.
2) Speaking of needing a CFO, one of the first things a CFO will probably point out to them is that their cash target is off by 100%. They're targeting hitting 50% of today's ARR sometime next year, yet they plan to grow ARR in 12-18 months by double. If they truly want 50% ARR on hand, they need to target $10M, not $4-5M.
I also have some questions about the graph -- I'm sure it's well-meaning but it looks fishy. The slope of the curve is noticeably better in the go-forward plan vs the status-quo plan, but there's no logic to support that in the post. I imagine there's a breakdown that makes this make sense, but it's not at all obvious, and the naive conclusion is that these people who were fired were actually slowing down sales somehow. Secondly, every time I see a graph where the next month is negative and then ... magic... and the slope goes positive, my spidey sense tingles pretty damn hard. That said, there are some obvious reasons this might happen, including the cost of the layoff being recognized next month, so that's less of an obvious red flag.
A couple of months ago they published a blog post which received coverage on HN talking about how they saved 120k by performing an audit of their infrastructure and killing unused AWS instances. It was obvious from the post that they were in the situation because there were no controls in place. And it didn't sound like they planned to implement any real controls going forward to prevent ending up there again.
Same reaction. They might be super transparent and everyone (in the comments at the bottom of the post) are in awe of it, but these numbers just make no sense.
FWIW, here's their public spreadsheet of salaries and calculations. Not sure if it's been recently updated (on closer look, seems to reflect the founders' stated pay cuts, and new hires as recent as last month):
I admire Buffer for being so transparent with their salaries, but I don't think I would ever decide to work for a company that mandated it.
In my (admittedly limited) experience, mandating salary transparency tends to increase the salaries of low performers and reduce the salaries of high performers. It usually eliminates the potential for negotiating raises and poses difficult questions about paying some employees more than others in the same band.
Case in point: according to Buffer's salary calculator[1], a "master" (their highest rank) backend developer living in San Francisco and optimizing for salary over equity would earn about $155,000/year. I can't think of any definition of "master" developer that could be competitive for. Friends of mine at AmaGooBookSoft and even other startups have earned nearly double that for being merely "senior" (L5).
The $155k salary might be due to the transparency, but could it also be due to a simple inability to pay developers $300k+? That's well over double the CEO's salary. I think it's clear they simply don't have the revenue and cash reserves to pay developers that kind of money. I suspect you'll find this to be true at a lot of smaller startups that rely on actually making money instead of fundraising.
Also, Buffer is entirely remote. I bet many people are willing to take a big pay cut if they don't have to commute to an office building every day (and of course, other people like office life -- but remote positions are rare, so it's normal that they're more "expensive" for employees who really want them).
What's the difference? Equity in a public company is cash. You can even lock in what your RSUs will be worth when they vest with some options contracts.
Because it's apples to oranges. You take a larger chunk of illiquid stocks/options at a private company in exchange for the risk that it won't go public one day. That's an active tradeoff people are making whether they know it or not, so you can't compare salaries at a private company and illiquid equity to salaries + liquid equity at a public company.
So if I enter a casino with 100 bucks set on betting on number 23, it means I actually own 1000 bucks? (or whatever that gives you?) Giving stock on a public company you can sell the moment that vests is valuable. Owning stock on a private company that you can't sell, can't probably cash in unless they IPO, etc is not.
I think you're going to get perfectly good developers for $150,000. Are you going to get twice as good ones if you pay twice that, or just greedy ones? Have transparency and let someone else pay the darlings. You'll still get your work done.
This exact "greed" rhetoric is what helps businesses keep dev salaries down. You don't get greedy people for that much, you get smart business people (they know their worth and charge for it).
What do I have to sacrifice to earn 100% more money? There's a lot more money in doing harm than doing good, and I will gladly take less money to do good.
In this case, you maybe don't have to sacrifice much at all. There are plenty of good reasons to go work at a large software organization, e.g. stability, and most startups will work you harder for less tangible benefit.
Exactly. If you are just greedy then programming is not the right field. Much more reliable to make a boatload of cash through other means if that's all you care about.
Some people may be willing to take less pay in order to have more control/freedom in a small startup, rather than just being a cog in the machine at Google or Microsoft.
Salaries in the San Francisco Bay Area are very high compared to the rest of the world due to high housing costs and extreme demand for engineers. $155k is average for 5-10 years of experience at a non-startup. You can certainly go much higher or lower depending on the company, your experience and your negotiation skills.
Cost of living is at least that much higher. Compare rent in San Diego (say, clairemont) vs Rent on the peninsula at equivalent house size. Easily 100% more.
It is very interesting to me that the founders have agreed to pay people in very low-cost-of-living areas almost as much as people in San Francisco. I'm pretty sure USD$95k in South Africa, Croatia, or Italy beats the pants off $120k in SF lifestyle wise. I guess the founders have not traveled to these places or fine with overspending?
The value the developer brings to the table does not fluctuate with the cost of living of the place he lives at. The profit that can be made in arbitraging CoL should mostly go to the developer, since he is the one who also has to bear the negative features of living in a low CoL place, which are often overlooked in a naive dollar-to-dollar comparison.
Looked at from the other side, it's a competitive process between employers and there's no reason why other companies wouldn't pay top dollar for a top developer. If Buffer didn't pay it, the developer would find another employer who would.
I have several friends who have received large salary increases when they were about to quit. This clearly shows that they were payed too little before. The kind of transparency buffer shows in this sheet can prevent such a situation.
Having a transparent formula for salary limits or removes the effects of negotiation, which likely benefits engineers (typically bad at negotiating compared to e.g. sales people) and women/minorities (worried about increasing "otherness" further and sometimes lower leverage, at least in tech).
There are potential downsides such as increased politics or income inequality pressures, but it seems like a viable policy at least. I'm curious how someone like Google's Laszlo Bock would respond to this approach in comparison to their "pay unfairly"[1] mentality.
It's part of their ethos, be totally transparent on how much everyone gets paid. You can't negotiate or ask for a different salary, there's a calculation.
I wonder if those laid off were from the "chose higher salary over equity" crowd. It's certainly more attractive to do so and that's something people should consider when given that choice.
TBH, that's a win-win. There's nothing better than being content with what you're paid, and then learning that there's huge upside potential.
The worst thing ever is finding out that you're in the top 2% of salaries for your role in the industry, and then knowing there's nowhere to go but down from there.
That's an odd statement. I don't think I'd be disheartened to learn I'm in the top 2% of salaries. That sounds like one of those good problems to have.
It also doesn't make sense - there is plenty of room to move up even if you're in the top 1% of salaries. The curve doesn't abruptly end at the top, there is a long tail of increasing salaries at the 1%, 0.5%, 0.1%, etc marks.
>There's nothing better than being content with what you're paid, and then learning that there's huge upside potential.
That's a good point. I feel somewhat fiscally irresponsible since I have student loans and such. On the other hand, part of the reason I'd like to make more money is because a lot of my close friends became engineers, etc, and make a lot more money. It's not very fun to always be the guy who is like "Uh, guys, can we plan something a little cheaper?"
I'm contributing to my 401k and I'm saving money on top of that though, so I don't really have much to complain about. It's just little things.
It's not a win win at all. If OP could get a job they were equally happy with in other aspects that paid more and had less commute they would be better off. Their situation is probably fine but it's hard to spin low salary and long commute as positives.
That may be true. We might also be looking at different job titles as well. I spend about 50% of my time as an analyst, and 50% of my time doing database marketing. Their employees in marketing roles and analyst roles are both paid significantly more than me.
I'm not entirely surprised though, the non-profit I work for pays poorly even compared to other non-profits. Compensation is the same for everyone on a similar level regardless of what the responsibilities of the role are. I have a much more specialized and technical role than everyone else, so there is no way that my compensation is commensurate with my experience or responsibility.
I'm not bitter about it, a huge part of why I'm under compensated is because I've been allowed to make the role my own and take on a lot of additional responsibility. In a sense I've grown out of my title. I'm just shocked by how much less I'm actually making.
As much as I want to dive into armchair management here, I greatly respect the fact that the buffer folks remained committed to the total open transparency thing, even when it didn't paint the business in a positive light. That takes a lot of balls
In a world where business failures are rarely documented, people ought to celebrate the fact that these guys are giving the world a recorded history of the lifecycle of their company, their thoughts when making business decisions etc. There is immense value to be gained for anyone in this industry
>> We canceled our upcoming team retreat to Berlin. Savings: $400,000.
Compared to all their other costs that one stood out the most. 500k savings laying off 10% of your workforce compared to 400k for a team retreat in Berlin.
That does seem astronomical. $4,000 per employee if they have ~100 employees like they say.
Anyone think their salaries are absurdly high for some locations and positions?
They've got Adnan working as an "Advanced Backend/Frontend Developer" in Sri Lanka, making only $65,104. This actually makes sense to me because Sri Lanka's cost of living is pretty low.
But they've got an Advanced "Happiness Hero" which I presume is an email support role making $77,397 in Kentucky. Last time I checked, $77,000 is an extraordinarily high salary in KY, especially for someone doing email support.
Yes, I agree with you. Unless I'm fundamentally misunderstanding what a "Happiness Hero" is, it appears they are paying a developer's salary for email support. $77k in Louisville, Kentucky would be about $135k in NYC.
$77k is not "extraordinarily" high for Kentucky without any context, but it would be very surprising for an email support role. In fact, I would expect $70k to be a very upper bound for technical support in NYC.
That said, there might be a very technical component of the job role that we do not have any insight on.
There are a few of them on their salary list and pay does not seem to have an correlation with working location. Could simply be level of ability and/or amount of quality work performed.
$4,000 would barely cover business-class airfare between SF<->Berlin for one employee. Not to mention accommodations, event space, meals and entertainment.
I cannot speak for Valley customs. But all of the (non-Valley) companies I'm familiar with extend business class to employees for international travel as a matter of policy.
I must work at the wrong places (non-Valley). Maybe that used to be common, but in recent years I don't see that for regular employees at all. Maybe for some layers of management.
I worked at 1 company that did business class IF your flight was over 10h or something, but in 2008 that got revoked. Since then not seen any business class for mere devs.
fwiw I've done a fair bit of international flying as an engineering guy over the decades and the only time I flew biz class was when going to an interview at Microsoft 20 years ago. Good times...
I have no experience with SF, but when talking about trans-atlantic flights, business class is less of a luxury than normal. If you are tall, overweight, etc. sitting in a small seat for 10 hours can cause all kinds of joint, spine, and circulatory issues.
I am very overweight, and I never have an issue flying coach on transatlantic flights.
I've found most flights from US to Europe typically have more legroom, than domestic counterparts. Typically I will pay for the 1st class upgrade for domestic flights, but fly coach.
I'm 5'6 and normal weight, I did a standard flight from EU->San Francisco and on the return when checking in I bought pretty much any update that was available to give me more leg room/space. I swear I will never do another 5+ hour flight that isnt at least business class. I had back pain for a month. My feet were swollen for a whole week that my shoes didn't confortably fit, etc that I will easily lose a paying gig over doing a flight like that ever again.
You're forgetting Premium Economy which more providers offer now too. It's a facsimile of business class of old, so no lie flat bed, but you get lots more leg room, wider seat, priority boarding (after 1st and Business) and a better meal.
It's incredibly rare for startups to fly people around the world in business class. And I say this as someone who flies long-haul exclusively in Business and First—I still would never expect my employer to put me up in business. As a personal decision, it can make sense. I'll buy the fare outright when it's $3,000 or less for an international round-trip, and I make sure of credit card points and frequent flyer miles.
If I worked for a big public company, I'd expect them to put me up in business for anything longer than 6h. For a young small startup, I'd expect them to put me in a reasonably convenient economy ticket (e.g. not flying out of OAK instead of SFO, and not forcing me to take long connections, or really ultra-low-cost carriers like WOW Air).
I am trying to learn about the business habits in the Valley. I wish someone could inform me.
To answer your question, obviously I am not from the valley, i run my own business, it is quite profitable, i don't do retreats, and i fly quite a bit, always coach. So if i ever organised a retreat, i would expect everyone to fly coach. Hence my question.
FWIW, the US Government's regulations for civil service workers (civilians working for the federal gov't) are pretty strict, and are often used as a basis for private companies. (EG, mileage reimbursement is usually a rate set by the feds.)
Their policy is business class for international flights over 8 hours.
Given that, I think it would be seen as common/acceptable to mimic.
I know we didn't send our guys over to Iraq and Afghanistan in business class. It's shameful that a rando in USAID or something would be afforded better accommodations for a conference in Tokyo.
Keep in mind: government employees who travel international are often diplomats. Gov rates for diplomats are, overall, luxurious. (I'm not sure of the bleedover here, but would not be surprised.)
Above comment about business class / direct for long trips, and at least direct/convenient economy for ~startups (not 2 guys & a laptop) sounds right.
My wife and I will be flying to Vienna next month. It's $1,300/ea including the return flight from Copenhagen (price was the same when we priced Munich when we were planning the trip, in case you're wondering about the fare differences between Austria and Germany).
I would never pay 307% of that price for an extra 3 inches of leg room and a free plate of salt and BHT.
What about 50% more [1] for a seat that turns into a bed [2]? International business class is not "an extra 3 inches of leg room" and can often be quite reasonably priced.
Serious question, how is business from ATL -> Vienna almost 5k? I don't understand this at all, especially given the fact that Atlanta is closer to Vienna.
In general, I'm always perplexed at the costs of flights, so was surprised to hear about such a relatively cheap international flight. Disappointing upon further inspection.
Meanwhile, I was in Berlin for three weeks earlier this year and spent less than $2k, including the plane ticket and my pass to an art festival. You strike me as a person who's never worked very hard to get a deal on airfare.
That's assuming what they do is straight e-mail support. I'm not sure what a happiness hero does but they might be expected to do much more than e-mail support. In many companies the "success manager" role tends to require people with more education and technical background to do in-depth troubleshooting and real customer interaction.
While Buffer's transparency is incredible, the financial calculations in the article fail to account for the possibility of an employee exodus domino effect, especially after both knowing the financial state of the company, and relevant perks being cut.
Machiavelli's _The Prince_ has excellent advice on this topic.
If you must do bad things, do them all at once. Then create a steady stream of better than expected events. People will get over the shock of the bad, and will remember the good.
By contrast if you try to hold back some of the bad, it will drip out bit by bit. Then people will get scared about where the real bottom is.
Might as well ask for the concepts of arithmetic, the necessity of work, or the 24 hour cycle of day and night to be banished. Machiavelli's aim was to catalogue how people actually acted, rather than dictate how they should act. He makes an observation of human nature, and suggests ways of dealing with it.
That's not to say that there may not be better approaches, in some aspects. In my mind I organise Getting to Yes and How to Win Friends as books that are complementary, yet approach the problem from a co-operative perspective.
But we haven't totally vanquished that part of ourselves that the Art of War and the Prince were written to deal with. Even if you banned these books, people would independently derive their principles.
I want to be sure I understand your central objection to these books. I take it that your objection isn't that trying to succeed is bad. You also probably wouldn't say that the particular advice in these books is bad, though that's an interesting discussion if you do. I'm also guessing you don't have an objection to old books in general, or to business advice in general. Is your objection that these books give advice for preventing and resolving competitive situations, and you believe it's better to not compete in business than to compete and win? This is an opinion I've encountered in places like Metafilter. (Seen you there!)
The Prince in particular is full of advice that runs counter to nice things we wish to believe about ourselves. That is where the phrase "Machievellian" comes from.
For example who among us wants to believe that once we come to power we should distrust those who got us there, and look for our best allies among those who had opposed us? Yet again and again in actual organizations those who think they are owed will try to take advantage of the situation, while those who have reason to fear that they never can be trusted will overcompensate for that.
Art of War is only useful in a short list of highly competitive scenarios. Most business is surprisingly not that zero-sum. And The Price is mostly useful dealing with the father/son business dynamic. Not that relevant otherwise.
The Prince is relevant in any organization where a strict hierarchy needs to be maintained. Which is why it was relevant here to the question of how a CEO who needs to implement a painful decision (in this case big financial cuts including laying people off) should go about it.
My take is that the advice in those books is great advice for those seeking to gain and hold power in organizations. All else being equal, you should want the person running your organization to have mastered those ideas and be able to apply them productively for your organization.
That said, having an organization full of people who want to gain and hold power is a very, very bad thing. While you want the people at the top to do so, you don't want every Tom, Dick and Harry with a big ego doing so. So you are going to see an anti-pattern where a bunch of people who have no business trying to play Machiavellian games, attempt to do so. And part of the the reason why they should not do so is that they are not suited by temperament or competence.
I would actually think the opposite: if you're a buffer employee right now, you know a) the company will continue to exist b) that you're a valuable asset to the company and c) that your founders walk the walk when it comes to transparency and information sharing.
I'd assume a few people will leave for better offers in the next few weeks, but this seems to prove that the founders are dedicated to the company and can learn from mistakes - hardly the prompt for a mass exodus.
Not only that, but the founders themselves took a 40% pay cut each for the next year. That says to me that they value their employees enough that they chose that route rather than lay off an additional person. It's a strong gesture.
Except it seems as though they all signed up to be at a company that was transparent and practiced a certain way of doing business (and actually pushes it as one of the great reasons to work there) and then you find out it was all a lie and that management was hiding information from you as suited them. By their own admission the layoffs came out of the blue to staff despite the fact that they were deliberating on it for a while.
If they practiced what they preached they would have laid it all out early. Some people may have had other opportunities and left, others might have said that they would take a paycut for the greater good, etc.
What this may mean, is that some staff members think that the company isn't actually what it says it is, isn't genuine in its approach, and that they can't trust it to live up to it's values when the going does get tough.
From the outside looking in, I think I'd stay (if I was not laid off :D) because Buffer is transparent, because they refuse to be unprofitable, and because they aren't beholden to VC's.
In my book, Buffer's doing it "more correctly" than many start ups.
I don't follow your thinking at all. You're assuming that the truth is always so horrible that management can never fully reveal it, and your not accounting for the whiff of secrecy and gossip that can be much worse than the actual withheld information.
Perhaps its because I've been at more failed companies than most? Regardless of transparency vs secrecy, you reach a tipping point where the situation "feels" dire enough that employees leaving accelerates. I'm sure it depends on the demographics of the org, employees with families, mortgages, etc are willing to stick out volatility far less (in my experience) than employees with no obligations.
Anecdotal of course! I'd love to have more data on this to find out what that tipping point is.
In this case though, the graph shows that the layoffs are bringing Buffer to profitability. If they kept that secret and just told the employees not to worry, they would be just as likely to assume that management was merely decreasing the burn, in which case their assumption would be worse than reality. Secrecy cuts both ways.
Right. In general, if you have a layoff and the job market isn't extremely tight, you will also lose some other employees you wanted to keep. Especially the ones who see that top management's plans aren't working and it's time to jump ship.
i wouldn't be worried about an employee exodus as they get loads of applications as is. and everyone is replaceable IMO.
the company fascinates me with their high salaries for customer service and relative low salaries for engineering. from that post, they've way more applications for customer service than engineering. why not save money by paying way less?
So just hire more people? No one is irreplaceable. Buffer is a very well known, and well regarded startup. An employee exodus would be a minor hiccup (and something that is very unlikely to happen at all).
Let's do some simple estimation! I haven't really looked at their spreadsheet, so this is just guesswork.
The product is fairly simple technologically yes, but the value is provided by making it easy to use so the customer saves time (= money). To do that you need a few UX people plus some developers (especially with web and mobile apps), call that 15 engineers/designers total, plus another 5 for ops. Now you need a sales team since your real money will be in selling to enterprises - call that 15 people. And on top of that you need customer support, and call that another 20 people. Now that we're up to 55 people, we need another 10 people worth of HR and 5 bean counters, that takes us to 70. Now cap it off with 10 managers/executives and we're up to 80, and I'm sure there's some things I was off about or forgot.
It's easy to forget about all the non-engineering resources you need for a medium-sized business.
If anyone reads this comment, FYI it is not remotely accurate. They have 23 just in engineering and 6 designers, with 2 in ops. We have AWS and these guys have incredibly run of the mill needs, why on earth would you need 1 ops person for every 3 developers...
They have nobody doing what you'd classify as a "sales." They have some marketing people, people doing whatever "customer research" is, a number of people working in "community" and a bunch working in customer success.
You need more in HR (or more accurately, HR/finance) if you have lots of remote employees, especially international. That's a ton of extra administration to deal with.
1) cron sucks, I hate using it. $10 / month to never configure cron again would be great.
2) Have you ever used Buffer? Chrome extension, in-app experience, cross-posting to multiple sites, drag-and-drop re-ordering, ...? It's not a single feature, it's "organize my social media posting".
At my company we had non-technical staff that had to update a YAML file to post editorial content to the homepage and mobile apps. For an engineer, IT person, etc, this is trivial. Not so for other people. I had to spend so much time supporting this I replaced it with Contentful (an API-based CMS). These are the kind of pain points that companies like Buffer try to solve.
Sales and account maintenance...I don't think it's a service/value proposition that companies (who aren't satisfied with building their own cron job) will just grok right away.
Your comment imply that you never worked in a company with larger customer base or in a company with sales department. I think this kind of comments is highly disrespectful to the team, given the the style how Buffer is managed and how transparent they are.
> Reflecting on it now, I see a lot of ego and pride reflected in that team size number.
This is one of the worse diseases I see in the tech world. I have friends who, when asked how their company is doing, respond with something like "great! We just hired a dozen more engineers."
I'm pretty sure a better answer is "great! We just got X customers," or "great! We're profitable now!". Not how big your fief is. (But, mentioning fiefs, I'm struck by the notion that a startup is just a business unit of a loosely-organized corporation and CxOs thereof just middle managers for an investor-class executive group.)
I'm curious as to why they had 94 employees. That seems like an insanely high number for a company that does something pretty basic (not dumping on the product, I like it and have used it in the past). What are all of those people doing?
> That seems like an insanely high number for a company that does something pretty basic
If you simplify a company enough, every company is "just" "simply" "basic".
examples:
* Walmart is the largest employer, but stocking shelves w/ automated checkout is pretty basic.
* USPS, FedEx, UPS DHL basically just deliver packages from one place to another.
In reality a large sales team helps you grow, a large customer support team keeps churn low, a development team creates new products, and a marketing team turns those into sales.
As part of a company of less than 30 in a rural region, I get that feeling a lot. I'm sure I'm wrong but what do 57000 google employees do!? Am I really hitting an immense mechanical turk when I use google? Yet they can't spare a single person to spend a few weeks to convert the flash off of google finance?
Kind of, yes! You would not believe how much manual labor goes into maintaining and load balancing data centers and keeping deceptively simple-looking services up and running... There has been some recent press on the work done by legions of SREs that gets into a few of the details.
I dunno we are 3 software devs, 2 network admins (also playing the role of top tier level, on call support) and run our own bare metal servers in two geographically separated collocation data centers. We also have 2 device hardware/firmware guys and the CEO also does a bit of coding sometimes.
Our solutions are sometimes a bit clunky but our infrastructure is audited yearly by an outside firm and certified to carry banking data through the wireless device we designed and through our network. There is another 15-20 people doing financials, payroll, hr, tech support, sales, marketing, assembly, hardware testing, shipping etc..
We maintain multiple backend interfaces to a bunch of (sometimes old and archaic) bank networks and to our wireless devices as well as multiple front end portals for our users.
It's hard to imagine ever being able to make use of 57000 bodies, but I suppose that's a totally different context. We could use a few more.
I worked at Google some time back. Take a look at the list of products [1] that Google provides. It's pretty long! Of those, 7 products have >1 billion monthly actives: Android, Chrome, Gmail, Google Play, Maps, Search, and YouTube. Things at this scale take a lot of effort.
Alternatively, a quantitative measure of effectiveness is the company's revenue or net income per employee. For 2015, that's $1.2M / Googler or $264K / Googler, respectively.
WhatsApp famously has 55 employees and over a billion monthly active users. That should be the role model for today's startups!
I think it's conceivable the reason you don't see much innovation from Twitter for years now, is that they have the organizational equivalent of traffic gridlock. It's simply impossible to get anything done with that many stakeholders.
They laid of 10 people, 11% of their workforce - which means they had ~90 employees.
Crunchbase tells me they have had almost 4M in investment since 2011 and Baremetrics puts them at 45M in lifetime revenues. So, call it a round $50M in capital.
50M/90 employees all in is around $135k/employee each year for the last two years. Subtract all the perks and those numbers get hard fast.
Just goes to show that, even with a lot of cash, a lot of people cost a lot. It ends up doing a disservice to each existing employee, with each new person your company brings on, if you can't scale revenue with the pace of hiring.
Love this comment. Because that's what happened. Maybe it's a cautionary tale supported by another meme -- never go full retard.
But they got up and seem to be dusting themselves off. So kudos for showing transparency when they mess up (which is when commitment to transparency actually means something).
I have mixed emotions with Buffer's shtick. On the one hand there's something fresh and unique about it. On the other, I think: just put your heads down and get to work serving customers!
I'm guessing the main benefit of the open-ness is marketing. I doubt it helps the company much beyond that.
Same logic goes for hiring. If you need to use this kind of gimmicky tactic--which is obviously bad for the company in the long run--to find new hires, it probably means you need to focus more on the core product to turn it into something that is naturally attractive for potential employees.
What is with capitalism's obsession with constant growth? Buffer is a great app, I use it every day, but how in the f*ck do they need 100 employees to maintain it?
My company is writing an entire smartwatch OS, including companion apps for iOS and Android, and we're less than 10 people. Buffer needs 100 people just to write one multiplatform app? What is going on here?
I guess I'm nitpicking, and the guy probably just needs an editor, but the whole tone of this post seemed tiresomely self-congratulatory to me. "Look at how frank and empathetic and open I am! Look at me ruthlessly dissect my own mistakes! Isn't that refreshing?"
It also all seems a bit maudlin — being laid off is a terrible thing, but mistakes happen and employees are aware of risks going in (although as others have noted, this type of situation underscores how inappropriate the whole "we're a big family" idea is). It would seem more respectful to the laid-off employees not to go on and on in this manner.
Good for them for being transparent even when the company is struggling, but if I was an employee at the company I would be worried. The chart they provide of Buffer bank balance over time seems overly optimistic. It looks like they assume that the employees they fire added no value to the company - they assume the company will generate the same revenue even after cutting 10% of their employees. This is wrong, and would worry me greatly that the founders don't seem to recognize this. Of course I would be worried anyway because laying people off at a start-up is a really bad sign, anyway you try to spin it.
This is a bit surprising. Buffers revenue has been solidly growing (up 23% in the last 6 months) with around 840K in MRR. I suppose having that many employees adds up quickly though. It's hard letting people go... But ultimately you have to do what is required to keep the company going.
I really like the transparency and accountability.
Two questions: Why are the two loans necessary? And, how does a loan get counted as savings?
> Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000.
This reminds me of Ben Horowitz' The Hard Thing About Hard Things, where he talked about implementing a plan to lay off 90% of his company in complete secrecy, for fear of employee exodus and loss of customer confidence. But that was a very different situation than Buffer is in now, as it happened during the original dot-com era collapse.
Kudos to Buffer for their approach to transparency. I think it will actually serve them well here.
It sounds like they handled this layoff both compassionately and professionally, although the founders have a lot to learn about balancing their spending.
But still, every company and employee needs to recognize that your coworkers and company are not your family - this only leads to misplaced expectations.
One of things that makes America so competitive, is the concept of at will employment - the company can fire or lay you off anytime and you can leave at any time too. This is a reality we must accept for capitalism to work at optimum efficiency. I realize this may seem heartless and cruel, but that's why you need to have work/life balance. Ideally work should not account for more than 10 to 20 hours of your life per week. Sadly, for most of us it's 40+ hours. It is outside of "work", where you can form relationships that mirror a family like structure - in volunteer groups (unpaid), friendship circles, hobby groups, book clubs, etc. More of our lives should be dedicated to such organizations for us to remain better balanced.
It's just an opinion. 20 hours (25% of the discretionary week, discretionary time is roughly 50% of 168 hours ~ 84 hours.) for me represents the maximum amount of time that could be considered sufficiently diversified.
I appreciate the forthrightness in this blogpost. Not only have they owned up to mistakes, the thought process in dealing with it (whether you agree with it or not or not) is well documented.
To be transparent is quite a difficult thing. You expose yourself to so much scrutiny.
Godspeed Joel as you and your team bounce back from this slight setback. We all fall. how we get up is what matters.
"We had just come out of a long experiment with self-management"
Why do startups do these huge management experiments? My company did the flat thing too and they spent a few months trying to get people to understand it. Probably burning up 5hr/wk for each person. Until they almost ran out of money. By then people were really confused. I think it almost killed the company due to the politics and red tape it created (strange, it was supposed to eliminate it).
My opinion is that it's hard enough to run a startup, let alone trying to invent a new management methodology. Best to go with what people already know. It may not be perfect, but at least there's some prior experience with it.
Just like how most would advise using the programming language and platform you know to build your initial product, rather than trying to to learn something that you think might be better.
we always talk about 3rd party platform risk for startups and to me Buffer is the prototypical example of one. If Twitter has a bad day they can cut off their API access and they'd be dead (ok they support Facebook and others but that's still 1/2 of your core)
So it seemed quite absurd they'd spend so much on things like retreats when they have so much risk.
From a tweet cited in the article (not the author):
> i think @dfjjosh's rule of 50% of ARR to operate and invest without $$$ stress is a really good one. use debt to hack it.
What's the point of taking on debt just to have more cash on hand? Is this a startup-y "growth über alles" type of mentality or is it found in the larger business world as well? I don't see how increasing your burn rate just to have more cash in the bank is a good business decision, especially when you'll pay a premium to have that cash in the form of interest or loan origination.
"Although I know rationally that the size of the team is not something to celebrate, I feel that I slipped into that harmful mindset quite a bit over the last year. Not everyone is familiar with growth metrics like monthly recurring revenue, but team size is easy to understand. Sometimes it impressed people when I told them how big the company was, and I was proud to share it."
Correct. Headcount is a figure that represents a company's means. If you're tracking it as an end result, you end up having to make hard decisions or someone makes them for you.
The transparency is commendable. A couple other observations:
- Affected employees had an average salary of $58.5k (assuming your metrics is net of benefits and payroll tax). If this is annualized, it appears you let go of non-engineers. Set goals and performance expectations for those who remain, especially those who build your product.
- Stop publicly promising salary increases altogether. Promote people based on their ability, not an artificial loyalty policy. Some people deserve 10%+ raises, some you'll find are overpaid. Use a basic job ladder and put the burden on managers to justify comp changes.
- If the policy of granting vacation bonuses was for recruiting purposes, you've successfully attracted people who want to be paid not to work. Again, implement a corporate bonus program and set goals for staff.
- Stop publicly promising salary increases altogether. Promote people based on their ability, not an artificial loyalty policy. Some people deserve 10%+ raises, some you'll find are overpaid. Use a basic job ladder and put the burden on managers to justify comp changes.
A guarantee of annual salary increases is problematic for three reasons:
a. An increase of 3-5% is going to increase salary costs rapidly as it compounds. He mentions that salary is 80% of cost, so it means that costs are going up for doing the _same thing_ by 3-5% every year. Employees aren't a fixed unit of production (particularly in a tech firm) but there's not unlimited new productivity either. It's fine if your prices are also growing at those rates ... but I don't think many people are in those situations at the moment.
b. It takes away the meritocracy
Salaries have to keep up with inflation, but beyond should be a mark of performance.
c. It's going to suck when they have to change it
Things happen, this is an example, and employee morale is a sensitive matter.
Appreciate the transparency, but they mention that they let people off on a "last in, first out" basis, and their flowchart seems to suggest that if they like an employee they'll move them to another role.
I don't blame them for doing housekeeping in that way - if you need to reduce headcount, start with people who don't fit the culture and business needs - but they shouldn't pretend that it's perfectly unbiased.
People keep saying "admire the transparency", "appreciate the transparency", but really what's the point? Who is the "transparency" for?
I really couldn't care less about my salary being made public to the world, all I care about is working on something I believe in.
Extreme transparency has nothing to do with their business growth and it will probably come back to haunt them later, I don't know why they're going so far as to do all this.
Doing business is extremely hard on its own, why complicate matters and expose private details to the public, which can and probably will at some point be used against you? I mean even on this thread people nitpick and gossip about every single details. And it would be a lie to say they care 0% about these things. If they do care, it just means less time worrying about their core business.
On deciding to not raise funds from venture capitalists:
"This has some implications on the true growth rate we can expect, yet it has significant benefits we feel in terms of the freedom we have to experiment not only with innovation in products but also in the way we work."
I think this reflects an important, often over looked point. Many people want to start a business because they prefer to not have a boss, and be able to make their own decisions.
In many ways, raising capital from outsiders can just replace one boss with another. Now you have to make your investors happy, even when it leads to different decisions than what you might make otherwise.
I think the goal is to replace one boss (whether it is VCs, a customer, an employer, etc.) with one hundred bosses (ie. tons of customers, powerless investors, several different freelance employers) so you can tell whatever one is causing you significant stress to FO. Redundancy and autonomy is, or should be, the goal, as opposed to business size or power.
> Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000.
Oops. This isn't savings. It's high-priority debt. Investors really want to invest in the future of the company, not the past. If these guys want to serve their company, they'll
(a) write this off their personal books, considering it an unrecoverable cost.
(b) convert it from debt to some kind of warrant giving them the right to recover it from profits at some point in the future.
I was wondering about that - they already took out $1M each in the last fundraising round at all - why draw a $200K+ salary and give half of it to taxes when you've already got plenty in the bank?
Why is this several hundred upvotes news? A startup grows from 30-something to 90-something it's too much it trims a little. That's entirely normal. What's the big news?
It trimmed the most recent employees, who decided to take the job after rejecting other job offers. Hiring 60 people in one year and then firing 10 of them in less than a year isn't nice and it doesn't feel nice. It's definitely a screw up in planning.
I understand why it can happen for sure, but still sucks.
Yeah, also I get the FIFO idea of firing, but for some people who have given up jobs recently. Or have come out of a startup which has failed and owed them salary it can be really tough. Especially when it can take a couple of months to find a new job if you're committed to the remote lifestyle. The share amount of applications that companies who operate remotely get means that it takes six weeks for them to even get to your CV, let alone go through the coding challenges, multiple interviews, paid trial, etc.
It boggles my mind why a company like buffer that has a relatively simple product and a pretty straight forward transactional sales model would ever need that many people.
I hadn't know what they did either, but their homepage makes it abundantly clear: https://buffer.com/
They let companies and individuals manage & schedule social media posts across a few of the main platforms (At the risk of doing them a disservice in my explanation, but also saving whoever reads this a click).
I had the same question. I clicked on a few links that I thought would lead to the product description but they didn't. Eventually I realized that the domain was open.buffer.com. Once you go to buffer.com, you see the product description. From the homepage:
"The best way to drive traffic, increase fan engagement and save time on social media."
I just hope they made the cut deep enough. A common mistake is to cut enough to just get back to break even, when what you really need in that situation is to get back to a decent level of profitability. The number of times I've seen a second round of layoffs because people got that wrong...
From the looks of their projections, they've done the right thing, back to profitability and growth.
Holy smokes... they put all new hires through a 45 day trial, then only keep 7 out of 10! I can't imagine getting the boot after a month and a half... by then you'd have made emotional connections. I guess it would work for those who are contractors thinking about getting a full time gig, but for those leaving other positions... wow.
Interesting as just yesterday I was praising the company how successful it is in this niche. It was posted on a thread yesterday which went like 'Successful companies which YC rejected".
And here the layoffs. The upper management were banking 250,000 the last time I read their details.
If you read further, they clarify that's 585k through the end of the year. So factor in a termination package for them and the 585k is less than half of their yearly salary, so they were likely at or above 100k/yr each. Makes a bit more sense.
Unlikely; that's probably the amount they would have spent until they'd have run out of money (in 5 months). They don't have any $40k salaries AFAICT (it's all public). Lowest salary was "junior happiness hero in Manila/Delhi/Hanoi" at $45k: https://open.buffer.com/introducing-open-salaries-at-buffer-...
The comments so far all seem focused on the language Joel uses (family, etc). While that may be fair, if you simply change those terms into whatever you think is more accurate, this is a very, very good piece of insight into the perils of growing too quickly, as well as an (as usual) extremely transparent look into how a company that is reasonably successful adapts.
I'm sorry if I haven't read all the comments, but this post basically tells me that the company should remove both founders and have a real CEO to do the right decisions from the beginning of the growing, 34 to 94 it's 3 times the size and having retreats and perks like those mentioned are not worth it specially for such a small/young companies
They're doing something very different from the run-of-the-mill kind of startup, funding, salary management and various other things.
I'm sure thousands of people have been thrilled with Buffer growing and thriving and see it as a breath of fresh air in a climate filled with bean counter CEOs who think anything and everything boils down to a number that can be turned like a set of knobs to change outcomes (and of course, most of them fail and jump to another job with a nice golden parachute). I personally think the executive compensation disparities that traditional CEOs bring in and how they deal with things are very damaging to all the humans who work with them. As a society, it doesn't forebode well at all to continue with the traditional model.
Regardless of how Buffer ends up faring in the next year or so, it will always be remembered for being different and doing things differently than most other companies. I feel bad for all the Buffer employees that they had to face this - letting go of a significant percentage of the workforce in a small company (or even a small division in a large company) can be really upsetting for everyone involved. The best that they can do, which they seem to be doing, is making sure that these people who're laid off get a decent enough job elsewhere. One can't really hope for that in many other companies.
"With our culture of bringing our whole selves to work and seeing team as family, with shared values we live by,..."
In the American business world, you are an employee until you aren't. Confusing being an employee with being "family" is a mistake, both for the company and the employee.
When times get bad, companies do what it takes to survive, including throwing employees overboard. That's just a fact.
Buffer may have thought it was different, but that flow-chart of how they decided who to layoff was entirely about how an employee can help the company, not how the layoff would affect the employee. That's not how normal families make decisions.
I have no problem with any of that, but anyone who thinks that way has another thing coming.
All of this isn't to say that Buffer was thoughtless or callous in how they handled it. From the outside, it looks like one of the better handled layoffs I've seen.
But still. Don't confuse your job with your family. It's a business relationship that is only maintained as long as it is in both side's interest to do so.