I don't have any special love for Shopify, but I think this is one of the best and most empathetic lay-off messages I've seen. No businessspeak, no buzzwords, no nonsense about great journeys. Total clarity about what's going to happen. Very generous and thought-through benefit package that protects those who are leaving.
Now, just don't tie those benefits to an NDA, and you'll truly be a company I'd look forward to getting fired from, Shopify.
Indeed. Compare this to Klarna's CEO https://www.klarna.com/uk/blog/company-announcement-from-ceo... who never mentioned the actual firing. 10% is "getting impacted". I find it ridiculous when people use language like this. Especially a CEO. Have some courage and say the thing out loud. Shopify seems to have a much better CEO.
In the UK you are not allowed to talk about people getting fired; you must talk about redundancy and roles (not people) being made 'potentially' redundant (i.e. 'impacted')
It's a very controlled legal wording and process for a large redundancy approach and must be adhered to very carefully so as not to fall foul of tribunals and unfair dismissals.
I don't know Klarna or Shopify from the inside, but I suspect this difference is largely down to the differences in legal obligations between Canada and the UK
IANAHR but "fired" is a special case of terminating an employees contract. It requires significant evidence of either malfeasance or poor performance despite significant attempts to help the employee improve. So, if you have that, you can obviously say it.
So, in my understanding at least, fired is "at fault" and redundant is "no fault".
>Those lines of code started a company and sent it on a fascinating journey full of wonder
I looked forward to reading a lay off message without the obligatory "what a journey" message but like that was in the opening paragraph. I'd say the message was fairly standard.
Honestly, it's exactly this that made me choose to work here over a higher total comp elsewhere. It's what's kept me even after the stock crashed so hard.
Tobi isn't a sociopath. The people he puts at the top aren't sociopaths. They're genuinely nice people, trying their best, and trying to do their best for everyone despite hard situations.
It truly is just a book club disguised as a publicly traded company.
Interesting, I have the exact opposite view based what I hear from friends who work there. Kaz alone would make me never want to work at such an anti-intellectual, purely opinion and aggression driven workplace.
Same here, but my view is from interacting with some of them, specifically some higher-up engineers. They acted as if they were so much better than you somehow. I don't know if it was the fact their RSUs were making them rich, or something. Not everyone is like this of course, but it left an awful first impression on me.
Yeah, that's common from what I hear. Also on the UX side you need approvals all the way up the chain even to Toby who can just veto your project a week before release for what amounts to personal preferences.
Maybe the dev side is better but my impression is that the design side has no ownership and is driven primarily by the loudest opinion rather than any sort of data or testing. And when you have five layers of approvals where people pick on the easiest and least important aspects that ends up being a very slow design by committee. The end result of this culture is very low efficiency and consistently mediocre outcomes.
The people who thrive in their culture appear to be the loudest and most aggressive.
There should be sociopathy/narcissim/lack of empathy screenings early in life, and people scored based on it. Based on that jobs would be limited/encouraged. Put sociopaths in jobs where impact is limited.
I guess that explains the stock price. I would never invest in a book club
In all seriousness, I would separate the fact the top executives are good people, with the fact (at least in the U.S) they have become notorious low ballers for top engineers
This reminds me that some Chinese tech companies (Bilibili and JD.com for example) fired people recently with words like "graduate from the company" and "congrats" them. It's really grossing.
This sort of thing used to be pretty common with large employers. A classmate got caught up in maybe the first layoff round of one of the old-line East Coast computer companies. He'd only been there a few years but as I recall he still got something like 6 months severance and he took off to Greenland for an extended trip before even looking for another job.
To everyone who says they want to get laid off-- this is an obvious sign that you should find another job! If you would quit your job for four months pay, you might be able to get that in a signing bonus and a raise. Plus, why be somewhere that you are so happy to leave?
Because there is so much more in life than work, and I don’t think there is any job somewhere that I would not be happy to leave, why people like jobs , how did we get to this point in time
I think this just means you haven't had a great job. When you have a great job, it doesn't feel like
work" in the same sense that a not so great job does.
I have been at startups where they just stop paying the office lease and salaries stop. These days i am just prepared for it. If you are in the backend side of things you can figure out most things with a few sql queries.
For the platforms I've built I've had access to the customers table for example, you know if it's growing or shrinking.
You don't even have to explicitly nose around, looking at the logs you'll see customer IDs and if they are sequential a keen eye will notice if they stop getting any higher.
We generated a report each week to let all the devs know how many customers we had starting that week, what products they were launching, how many users they each had...
It was great for planning the on-call rotation as well as giving us a heads up on which nights we could go out drinking and how late we could come in the next morning.
Last job I had before this one, I came into work the week before Thanksgiving to a mandatory morning meeting that consisted of "the company is out of business effective immediately, you will all be emailed your severance details by personal email, please clean out your desks".
if you have to query the database to tell how the company's doing- or you don't trust what they're telling you- that's probably a pretty big red flag by itself
This actually makes laying off a recent hire sr employee more expensive. As they’d need to pay out all the equity and 16 weeks of expensive base salary.
if it’s a standard one year cliff then it just means if you’ve worked there for 5 months you get 5 months of equity whereas you would have gotten zero. it’s not “all the equity”
Also Shopify is -80% ytd so if you were hired the beginning of the year you were expecting a completely different compensation package than you are getting now.
Yeah, I think this is correct. I've been in a position where the company that hired me couldn't keep paying me and we decided to part ways a few months short of a year. The founder offered me the amount of options that would have vested had there been no cliff.
Even RSUs are converted from a dollar value to a number of shares in the month you join. If you’re getting them a year later with this level of stock decline a $220k/year salary and $220k/year of stock would be $264k of compensation when you were expecting somewhere near $440k. So even with RSUs the pain is real.
I wish I could get that offer right now. I would take it straight away.
That reminds me though. I went through quite a few big layoffs at GE and one of the better ones was when they were offering people 26 weeks of pay plus one week for each year of service. Many of these people had 20+ years so they would have gotten nearly a year of pay to quit. Almost nobody took it.
The downside is that the worst performers get the best severance benefits - each round of layoffs reduces the benefits and gets rid of the less expendable folks.
I don't know if the way this works really correlate to worst / best performers in this case or in my experience. I once worked for a company that after some great successes slowly went bankrupt. Naturally there were many episodes of layoffs and in general I would say people were let go based on changing priorities. You could have been a great employee in an area they were going to pursue and you were gone.
After the first or second round of layoffs that I avoided, I mentioned to an older employee that I was really glad to dodge that bullet. "I don't know," he said. "The earlier ones usually get the better deal." This was so true! I stayed until the doors were closed for good and didn't even get vacation paid I was owed. I don't regret it though because as the company imploded I got to try my hand at new roles, and worked with a really clever team that tried heroically to turn the company around.
You assume that the folks receiving severance are actually "bad performers"; layoffs are not the kind of mechanism that cleanly separate "good" from "bad" performers.
Well, when a company starts considering who to lay off, they're not gonna start with people who they think are rockstars. At worst those folks would get reassigned.
Only the first time and even then not really true. Reassignment assumes that reqs haven't previously been canceled as part of belt tightening in those other groups.
Also, by layoff N, you're cutting meat unless you are a massively bloated company, which is somewhat rare this time around (unlike HP, Cisco, Sun, etc. in 2001).
I work at a series B startup, and even we are bloated. It would be next to impossible not to be given the prevailing funding environment of the last 10 years.
Well considering that a large chunk of the layoffs were in recruiting and that you basically have a hiring freeze I am sure plenty of rockstar recruiters were nonetheless laid off.
The funny thing is, and it shows in this mail, Tobi built a true profitable Unicorn. And outside of Shopify, and even within eCommmerce, he has such a low profile as a person. Founders here in germany look to Musk, I suspect (and now for a fact) a lot of them don't even know who he (Edit: Tobi) is.
I like that mail, ckear, to the point, factual and self critical. Severence packages are good, really good. All in all, quite a change from other companies firing people over zoom.
It's always been interesting to me --- most people dont realize it's way better to be rich and unknown then be known to be rich. Tobi can't hide that he is rich at this point, but I bet he can go into most restaurants or bars outside of CA without being accosted.
"Most of the impacted roles are in recruiting, support, and sales, and across the company we’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products."
Important to keep in mind that engineering roles may not be as affected as other departments.
AAA gaming is probably the worst possible example you can look at for what a well-run, sane team would look like. So let's say if you only want your people working 40ish hours a week and not 70-90, you'll 2x or 2.5x that count. Shopify also has a lot of dev rel folks even if they don't call them that - people writing engineering blog posts, working on tutorials, documentation, etc. They're typically not the same people actually working on core code day to day. My guess is all the infrastructure and security people at Shopify are non-devs. You'll also have all the devops people who are managing all the pipelines and everything. My understanding is Shopify deploys to prod many many times a day (hundreds?). The pipelines to automate that, and automate or at least manage the rollbacks, would be at least as complicated as the code itself. And across all these different areas you have that amorphous "Staff/Principal Engineer" level where you're doing a lot of reviewing, pseudo-management, that sort of thing. Not to mention managers, directors, VPs, SVPs, etc.
But you ask how they can productively use the time of 10k people and I think this post is sort of evidence that they couldn't.
I understand the need for support around a complex and constantly evolving codebase, but this is the scale of it that I can't grasp.
Software is supposed to scale almost for free, they don't need people to actually make the transactions and push the bits by hand, this is all automated.
My guess is they have a lot of sales and an enormous amount of overhead.
According to Price's Law about 100 people are doing half of the work, but of course it is difficult to guess which ones and they still need the other half to be there.
The more your software touches real money and merchandise, the more time you have to spend to make sure you're not breaking the law in any country you're operating in. It's not fun, it's very error-prone and it's very important to get right.
Hard to say without knowing what they're working on. Maybe there's a lot to do with integrating other software/services. Maybe they've got a good devops org to help smooth the process for everyone. Sometimes having a few more people than you need on many levels makes the org a lot more resilient to individuals leaving so the org can keep on rolling without a hitch.
If your system doesn't have any slack in it, how can it respond to change? Having a slightly underloaded system is definitely the way to go, it leaves you with some gas to change direction if you see that you're barreling towards a cliff.
Well, the transition from 2k to 10k people isn't something done to add slack to create a flexible system. For that you at most double the number of people, you don't multiply it by 5.
They must have changed something either on their product or on their procedures on those 5 years.
My guess is they decided to start writing more tools internally instead of relying on external vendors to respond to their needs. Again, hard to say. How much did eng grow vs sales/support.
> My guess is they have a lot of sales and an enormous amount of overhead.
That's not overhead, it's business.
Software people think that they're crucial. They are in the sense that the thing has to be built.
But if nothing is bought, the business goes under and the software is scrapped.
"The overhead" makes the business work, makes people buy it and continue using it, helps them when they don't know which buttons to push, which integrations to use, etc.
> Even the biggest software teams I have seen were rarely larger than 50-80 people. And they were working on large complex codebase for AAA games. […] How can they manage to productively use the time of 10000+ people?
I work for a 100k-employees company. According to the internet, a third of it are engineers.[1] I think I can explain.
First of all, I think the AAA game example is bad. Most of my acquaintances working in the gaming industry work long hours for a crappy salary compared to their skill, because most of them are passionate.
Most business software is written by overpaid engineers who see the whole thing as a 9to5 job. So you can already divide the amount of hour worked per employees by at least 1.5 if not 2.
Even then, if you take something which seems as simple as Shopify the system can be made complex for managers and directors to justify headcount.
It's an e-commerce website, right? So you can split 100 engineers over 5 teams. 10 "production engineers" (or SRE/DevOps/SysAdmins) and 10 software engineers for each team: - Product search team; - Payment team; - Authentication team; - Admin UI team; - CRM team.
Once you have 100 engineers, you can multiply your headcount by 10 by just splitting each of these teams into five more. If you take the Payment team, you can create a credit card team, a paypal team, an alipay team, … For product search, you can create a team to manage just the suggestions of the search bar, another team which optimizes term matching with products, another team which does the list of related products on the side bar, …
I just found jobs for 1,000 engineers, right at the top of my head! Now you have so many engineers and so many customers, you also need internal tools. You need an internal tool to manage customer refunds, customer support, etc… You need HR tools for vacations, performance review, …
Of course all of this comes with waste, but who cares as long as you're offsetting it with your revenue? ¯\_(ツ)_/¯
Anyway, this is why I will never be a business person :) .
I just got laid off from a ~1.5k-employees private company that applied the same method to split up a large monolithic cash cow (crafted from scratch by a small clique of hackers who met early in life) into microservice and microfrontend internal products because it looked like a good long term plan in Q2 of 2020 and we thought we could scale that forever and start selling our dog food as a service.
Something went wrong, and we hit a ceiling very early. The amount of waste that was generated by the rigid management ecosystem that was created to sustain such a large scale up (for tracking purposes) became so strict that any and all attempts to use the scientific method to solve anything by the then-outnumbered engineering staff became impossible to justify to any non-engineering roles.
If the task didn't fit in a 2 week sprint, it couldn't be planned.
If it can't be planned to be shipped from scratch in a 2 week sprint, from analysis by both your BE and FE devs to both of them shipping at the same time by end of the sprint, it couldn't be done.
If you needed to solve for "what do people wish they could buy?" instead of optimizing for "what are the most humans currently using?", it couldn't be done.
We constantly regretted not sticking to our engineering principles.
The system collapsed. A lot of nice-to-have-but-working-at-a-distance positions were eliminated, as well as a few individual contributors that management hadn't realized were important to their core functions but were hired too recently and didn't have time to adjust to the point system.
I wish I could tell you what happened next, but the layoff happened. Most of us thought it would happen because management would finally realize the (human) system was designed poorly and without a good feedback loop while growth happened. But it turns out they might have only reverted to a previous commit of the organization structure and are still intent on trying again with the same rulebook.
Slower but infinite growth is still the objective, excessive tracking is still the norm.
Their marketing had been doing poorly in recent years, and the layoff wasn't even mentioned in the news, but it seemed like it affected a lot of devs in my neck of the woods despite the near complete lack of media coverage.
Does this happen often? Is this what scaling up always looks like?
Not even to mention the impact Conway's Law suggests! As a company grows in number of specialized teams, you'd expect to see magnifying difficulty in having efficient communication, eventually impacting what the product looks like (or at least, how robust the code is and how easy it is to augment). Seems like it could be a bad feedback loop - code got more complex indirectly because of number of teams, so naturally you hire more people to maintain the same output.
This is the problem. IDK about Shopify specificially, but a lot of these companies don't have revenue, or it's far from offsetting their expenses. That was OK as long as more venture funding was readily available; today that's not the case.
I believe that you're biased by HN, since a lot of the discussion here revolve around over-valued VC-money-roided-up startups burning millions of dollar per months.
If you're looking at big tech, telco, banks and finance, there are a lot of companies where headcount waste is offset by revenue. Many of which are even making profits. According to wikipedia, shopify had a net income of ~$3B for ~$5B of revenue in 2021.
SHOP: $4.8B in trailing 12-month revenue, growing 70%+ YoY for last few years and $250M in positive free cashflow.
They're likely predicting eCommerce growth slowing a bit (combination of post-COVID & reduced consumer spending), so pushing for better fiscal discipline & improving net margins going forward.
I just found jobs for 1,000 engineers, right at the top of my head! Now you have so many engineers and so many customers, you also need internal tools. You need an internal tool to manage customer refunds, customer support, etc… You need HR tools for vacations, performance review, …
I think the complexity demonstrated in your post is a reasonable explainer for why companies like Salesforce and SAS are so highly valued - it stops a lot of those teams needing to exist at companies for which proprietary tech isn't a competitive advantage.
Your example is pretty illuminating. AAA games are one-and-done: you ship, and then the codebase is basically frozen, and you make money off expansions. The other area where team sizes top out at 50-100 people is desktop software, where (barring future versions) it's also one-and-done. You sell a software package, money comes in, that's it.
The way the calculus works for Internet-based SaaS is: say you have revenues of $4B (like Shopify), and an engineer costs $400K. If the engineer works on a project that improves sales by 0.01%, it's profitable. If a team of 10 engineers works on a project that improves sales by 0.1%, or 100 engineers improving sales by 1%, it's profitable. How many 0.1% opportunities do you see in the product? How many 1% opportunities? What if you add risk? An engineer might fail to see any effect on 4 of their projects, but if they improve sales by 0.1% on the 5th, they've still made the company twice as much as they cost.
It's hill-climbing. There are usually lots of 0.1% opportunities available with a big worldwide SaaS. Things like localization and entering new markets will generate way more than that; even things like moving around CTAs and changing colors will usually generate more in profit than the engineer costs.
Also add to that diminishing marginal productivity of each engineer. In a team of 5 moving a button around takes an afternoon. In a team of 1000 it often takes a couple quarters, because you need to get sign-offs from all the teams that the code touches, run it through QA, and gather metrics to show you didn't regress anything. The engineer is still profitable, because the effect of their change multiplied across millions of users is way more than their salary costs. But they're not as profitable, because they work so slowly.
I've also seen this kind of operations in mobile games.
At Supercell, they have some old titles generating around 400K of revenue per day, with a minimal team working on new features, fixing bugs, looking after numbers and trends, managing ads... All of that with less than 15 people.
Of course this is not the same scale, but they have a LOT of daily users, and at their peak the company was about 200 people.
And I've been there, I can tell you that there is ample slack, most of them are barely working.
I understand what you mean. But then why cant the big tech hire support staff (looking at you Google).
Probably lots of money could be made with better support.
Microsoft seems to do it thr correct way - I worked at a "boring" company that had a lot of licenses and we had highest tier support - we found a bug in Excel (!) and they fixed it.
If you are a small fish you wont get any support and often not give money. I wonder if this doesnt add up.
I agree with you for the most part. The number of people who could run Shopify at the current scale is definitely more than 80 people but probably less than 10000.
They took a big bet on global growth and this would've exploded HC related to sales, marketing, compliance, recruiting, etc. They pulled hiring forward on an expectation that the market advanced 5 years during COVID and now have to cull that new growth. Lots of late stage private companies and recent IPOs are going through the same thing.
And in that light ten percent isn't even that much. It really sucks for those being laid off, Shopify seems to take their responsibility for their people serious so (if they follow through with what they promised). And yes, pulling your timetable and hiring forward was bet, but a less risky one than it turned out to be in hindsight.
More general, we had the 2008 financial crisis after one not too big investment bank went under. Covid did, despite all the real world damage from lost lives to the economy, not doing anything like it. I always wondered why, aparently more free money, on top of all the free money we had since 2008, helped. I just hope that the postponement of hitting a wall doesn't mean we ginna hit it much faster. We'll see...
Not much. They're now starting to fire a bunch to make the rest quit.
I'm in a well run, immensely profitable, 100+ yo company, so big a country needs us to run, literaly, and a few others would be destroyed if we suddenly closed shop and ran with the money.
We are 60 000 and feel too fat. I cannot understand what frigging shopify is doing with 10k people. We make 5bn a year profit these days, is shopify close to 1?
Edit: waoh, they indeed were at 3 bn last year, 300mil the year before, -100 mil before, without reading the details. It's not regular profit but if it was, it'd just confirm we're too fat, not them :p
Needing to have a big team so that you can refactor into microservices, which you need because you have such a big team is a very "the bureaucracy is expanding to meet the needs of the bureaucracy" sort of thing.
Scale is harder to manage as the userbase grows. A lot of popular services could run on one machine if you can live with 3 nines of reliability and never scale past 100,000 users.
When you reach that scale, you also start doing lots of product work that's either exploratory and unlikely to matter, or micro optimizations trying to move the needle 1%. If you hit a win on one of these, because of your scale, the win can be huge.
I've seen large companies and it's astonishing how little work and how much process they have for minuscole changes.
The only productive way of managing this is do what Google or Amazon do: split in sections and teams and get them to do something independently, with the hope that someone will struck gold. It's a bit like a venture incubator and - sometimes good things come out of it, most of the time dead products come out.
The company where I'm currently in is ~200 engs and a few companies ago with 50 engs was easily 10x more productive and had a way bigger codebase.
Management is either too useless to care / too attached to saying they have N underlings and the business makes so much money they can afford to spend x% on tech workers, just to be safe.
So many times I see this kind of comments were people totally ignore the complexities that comes with large scale projects, huge complex legacy codebases that need to be maintained. What they see is a simple website that can be build by 5 people startup team in a day.
Let's say that each product dev team is about 80 engineers.
Let's double that number for support, HR, admin, etc.
Let's add a team of 10 people for sales ( not needed for internal products but hey)
Now let's round it up to 200 heads.
That would make 50 large software products, is that right?
It's more than 50... I mean just look at the number of API endpoints across multiple APIs both internal and external. It's easily hundreds then add sys ops, dev ops, dev content writing (docs/guides), frontend, design, pm, support, etc.
I feel like most of you all are unaware of the complexity and scope of Shopify...
On a large chunk of Enterprise Software you'd have teams of people working on specific features / subsets of a larger product.
I.e. a team that is working on only Facebook Messenger back-end, a team working on Facebook Messenger Front-end, a team working on Friend Recommendation, etc.
Each of these teams is let's say 10 Dev, 2-4 QA, 1 Product Documentation, then all the normal overhead of HR, etc.
> What are the safest industries in tech right now?
If anyone knew what's safe then you'd see investor dollars pouring into those industries right now. At the company level you'll have a much better chance of survival if your company makes a profit (which is frighteningly rare these days). But overall, during downturns, it's only possible to know what was safe when looking backwards.
My experience, having entered the work force in the shadow of the dotcom bust, is that the best path to safety in tech is to be in the highest percentile of skill you can be.
As boom periods extend more and more people flock to tech because of the money. If you were in industry pre-2008 you'll likely recall that most programmers in tech were in it because they had a passion for programming (especially in the growing startup scene at the time). Eventually we get to more recent years when you have boot camps just churning out mediocre devs.
Things were very similar in the dotcom boom, and after it went bust there were many programmers who never went back to programming. And nearly everyone took pay cuts.
One good thing that changes in crashes is people start looking for sincerely good and experienced people more and more. A seasoned dev, who during boom times is an annoying hire when you're just trying to drive up head count, becomes a valuable asset when you need just enough devs to get the job done.
So depending on how bad this gets determines which percentile you need to be in to maximize your probability of keeping your career. A small correction just means the bottom 10% disappear, in more severe cases only the top X% might survive. The other thing that changes is that interviewing will become as challenging as it was for the previous cohorts lower percentile. For example if you're just above average getting a job in the future will feel more like a newbie programmer just out of a bootcamp, if you're in the top 10% and previously didn't have to try to get jobs, it's going to feel more like an average dev struggling with their first leetcode interview.
> you'll have a much better chance of survival if your company makes a profit (which is frighteningly rare these days)
What do you mean by rare? The biggest employers in the world [0] have massive, healthy profits. I tried to find the biggest company that was money-losing but gave up after looking at the top 25. Even in you look specifically at tech [1] this is true.
If you're looking for safety in tech, look at the individual companies rather than the industries. Sure there are some industries that are slightly better or worse than others, but overall there isn't a huge difference.
Why look at the companies? See who's growing in a logical fashion. If the company doubled in size at the start of COVID and keeps growing at similarly crazy rates - that might be a sign of trouble. It doesn't matter if the company is 100, 1000, or 10,000. The same general rules apply.
Belts are tightening. If a company was hiring stupidly/risky, they are going to need to lay off people - unfortunately. Or maybe they don't "need to" layoff, but they will want to. We've already seen this at some of the bigger tech companies.
The safest companies are the ones that understand the basics of burn rate and do not hoover up VC money to show fake growth, by growing its headcount to insane levels (and employ an army of engineers who design and maintain ridiculously complicated systems as part of resume-driven development).
Defense has a lot of challenges. The government isn’t a great or reliable customer. The contractors tend to lay off on great waves if they lose and important contract. They have quarterly earnings targets to hit like everyone else.
People used to think the phone company was a safe spot to lay your hat but they found layoffs too be an easier way to goose earnings than growing revenue.
Sure but they have steady revenue streams and are less susceptible to conjuncture. In my neck of the woods I see a lot of hiring. Those trying to cut costs would rather internalise consultants and cut their firms out rather than get rid of otherwise necessary workforce.
> What are the safest industries in tech right now?
Just be good at your job. Ive been through many layoff cycles and its be extremely rare to see the good people laid off. Be undeniably the best and you'll always be safe and compensated.
Historically enterprise SaaS with strong product/market fit has been (comparatively) safe. Companies tend to get hit in order of consumer > SMB > mid-market > enterprise. The above does not apply if you're a high burn organization that overhired, those jobs are at risk in every industry except maybe the government.
(Of course nowhere is entirely safe, even in good times)
In a downturn, enterprise SaaS vendors have to cut back on development and hold on to the customers they have. They aren’t winning new big contracts, and losing a few big customers could be fatal.
And when you cut back on roadmap on a product like that, consolidation starts looking sensible. That’s when you get bought out by Oracle or ADP or someone.
Yeah I mean bad things can happen to anyone, but relatively speaking enterprise tends to be safer all else being equal. A great consumer company is still probably safer than a decent enterprise SaaS company.
"losing a few big customers could be fatal"
For sure, but there's also a long history of enterprise companies weathering this just find (eg Twilio famously churning Uber). There often is just less pullback than one would think as well, it's typical to see 3+ year contracts in enterprise.
Ironically, crypto VCs are sitting on a lot of dry powder and the narrative is much stronger (WEB3! METAVERSE!) since it is completely detached from reality.
In situations like these where the wealthy still have a ton of money, it is far better to be in a business that a) the wealthy don't understand, and b) is so outlandish that you can't assign a hard value to it.
If you make $1 in profit, then investors can assign it a hard value (10-15x ARR). If you make $0 in profit, then investors can spin up narratives about your "potential".
if Peter Zeihan is right about population and boomers. our world is shrinking with less young people for consumption, boomers retiring and taking their money to less risky investment. the money that prop up start up could be dry pretty soon.
That's really the calculation people need to make.
At a large tech employer? How are they doing? Is what you're working on strategic? Do you seem to be valued or are you maybe a bit on the bubble?
Depending on the answers, it may make sense to stay put or it may make sense to find a life raft even if it isn't as cushy in some ways as where you are. And, as someone else noted, industries aren't homogeneous. Individual employers matter.
I had lost a job at the time (company dissolved) and had been unemployed for six months by the time the offer was extended, so the choice was easy. If you currently have a high income job and a robust emergency fund, you can make other choices.
It's certainly a nice severance package for this day and age. That said, hiring is pretty broadly more selective right now and may well become more so.
During dot-bomb, I got lucky and landed another (lower paying) job with someone I knew at a small company. But there were a lot of people who were out of work or underemployed for a long time. And some I knew on the older side never really recovered I think.
The physics of civilization and general incompetence of Western leaders is raining cash on these companies, but the demonization of the sector by the globalist elites[1] mentioned above means that they are desperately short for people in every position. From well tech to field IT, to the guys in HQ handling well-management software, all these positions will need to be filled.
It is a boom/bust industry, but it looks like we're about to begin a prolonged bull cycle.
Safe? Probably anything supporting an industry that isn't affected as heavily by the downturn. There's no shortage of work in Industrial Controls. Most work isn't glamorous cutting edge tech, but there's sectors to work in that are engaging.
> What are the safest industries in tech right now? Feel like it’s gonna get worse
The ones that make the most money with little head count in a short amount of time and those who are selling shovels and offering services for financial institutions or in trading systems.
I disagree - I think fintech start ups are about to get squeezed hard. As capital gets more expensive their lack of growth will be hard to justify and they can no longer subsidize their subscriptions with low cost capital so will have to force users to pay for services that aren't very necessary. That and most of the financial services at the end of the day don't really provide a lot of real value that people are willing to pay for.
Fin processing should be OK but if volume of processing drops significantly (main revenue driver) then they will have to look at ways to protect their margin.
Crypto is already in a bad spot with low growth options.
I'm not talking legacy - I'm talking startups that are trying to take market from the bank through subsidized VC and repackage it to sell to the banks which feels like a lot of the fin services business model.
If anything fin legacy (i.e. IT dept) probably pretty safe.
Lots of insurtechs - including Root, Lemonade, Policygenius, Next, and Vouch, just off the top of my head - have had layoffs this year. Insurtech is a really broad field, and the unit economics vary wildly depending on where in the value chain a particular company is operating, so it's hard to generalize.
Typically layoffs hit civil servants with a lag of a few years since government budgets are already decided before economic down turns, and only really impacted when the next budget is decided.
For example the friends I had working in the public sector during 2008 didn't start to get really hit until 2010.
> Typically layoffs hit civil servants with a lag of a few years since government budgets are already decided before economic down turns, and only really impacted when the next budget is decided.
For federal government, it is usually delayed because downturns tend to provoke temporary countercyclical deficit spending, and thus hiring.
For state governments it is often sooner because operating deficits are structurally more difficult for them, so revenue cuts are reflected in spending more directly, though short-term circumstances may be addressed by furloughs, hiring freezes, real pay cuts via wage freezes during inflation, effective (temporary or permanent) pay cuts by altering employer/employee sharing arrangements for benefits, attrition, and other non-layoff means.
Were they working as contractors for the government or as actual civil servants? It's common for hiring to essentially stop during downturns but still relatively rare for true govt employees to be laid off.
It's like saying, if you are building the next google (early days) you can still easily get cash. Sure but not as much as say 6 months ago. It isn't easier than any time in the last decade - 6 months ago people didn't even do due diligence before the wrote massive checks.
Companies that have been growing sustainably and building innovative technology that reduces costs 10x (in a recession) get a lot of attention. Especially if they are turning a profit without any accounting tricks.
Companies that were never going to be profitable are having problems raising money now and sounding the horns. There are a lot of those companies, especially on HN, but please don't categorically dismiss my experience as a fantasy.
Still doesn't resonate and unfortunately I will point that your experience does not represent the broader market. Just because you (assumptions made on your comment about personal experience) made a fast round doesn't mean that the market is easier or better for raising - it probably means you found product-fit/sold it better or some other kind of micro strategy benefit.
My comment is and still stands: if you are making something truly amazing then you will almost always find investors (which isn't a good metric). If you were making something amazing 6 months ago you would have gotten more money on more favorable terms. This market isn't easier or friendly at all - investor appetites have changed.
Investor capital flows towards whatever will generate a return fastest. Money is flowing into shitcoins daily, should I take that as a signal that that's where innovation is happening? No, because innovation and investor sentiment do not map 1:1.
Shopify stock is down 80% over the last 12 months, but their P/E ratio is still 250. I predict more rounds of layoffs for Shopify, and with less generous severance packages. This company is valued as if they are a hyper growth startup, and I just don't see it. Good luck to anyone buying or holding this stock.
They're this era's Nortel (Canada has a primo bubble stock with each big run; during the housing bubble era it was Blackberry).
There's very little that is special about their business. They have no great competitive moat. It hasn't even demonstrated good margins ala an eBay. The hype started with Amazon's stock liftoff, which was overwhelmingly due to AWS not retail. Investors went looking for the next Amazon in ecommerce and foolishly bought into the premise that Shopify would be that. Now all the bubbly ecommerce valuations are collapsing, as they should. Stocks like Etsy and Fiverr still need cut in half again at a minimum.
Shopify is worth three to four times sales at most. Compress that further as their growth slows. The stock will stagnate for at least a decade vs the highs it hit during this bubble.
>They're this era's Nortel (Canada has a primo bubble stock with each big run; during the housing bubble era it was Blackberry).
It's interesting how Canada has exactly one each time around; no more, no less. While having one is certainly better than the average of zero for non-US developed countries, and having each be in a different sector is also good, I suspect that each also benefits/benefited from being the hot tech company that those in Canada had to go to if they didn't/couldn't move to the US. (Elsewhere people have mentioned Shopify being known for lowballing salaries.)
>There's very little that is special about their business. They have no great competitive moat.
I don't know. Shopify is known as the company you go to for quickly setting up an ecommerce storefront. Yes, there are competitors, but Shopify seems to be the brand name in the space. Unlike Apple vis-a-vis Blackberry, there doesn't seem to be great risk of someone coming in with revolutionary technology and immense market reach that upsets the field overnight; we're coming up to 30 years after the release of Netscape, after all.
>This company is valued as if they are a hyper growth startup
Agreed. I think Shopify is a great product, but they were huge beneficiaries of the COVID-19 lockdowns and Robinhood culture of 2020/2021 (their only profitable years?).
Wonder what makes you think of Shopify as a great product?
I work with it on quite a high level position and everything about it is plainly terrible: support (terrible, only few people that care can help), management (many promises - zero delivery), tech side (team is suffering from ways their API works).
Part of the reason I got out of recruiting is that recruiting is always part of the first to go. Then a few months from now when Shopify decides it needs to hire again? Recruiting job posts go up like crazy.
Losers are not recruiting. It's a "win more" move, statistically. I don't know why it would be a bad idea to pick a career that tilts you toward being on a winning team if you care about the economics.
Their marketing spin doctors have been preparing for this wave of firings for months, they just wouldn't stop spamming ads bragging about how many people they hire.
The article says that Shopify is reeling from a post-pandemic fall in demand that the execs didn't see it coming. But forecasting is hard, and even if they had seen it coming, they probably would have needed to hire broadly anyway.
One solution here is to move from 'at will' employment explicit 'tours of service' [0]. If you had hired a bunch of staff in June 2020 under a 2 year contract, with renewal not guaranteed or even expected, you essentially have a built-in mechanism to match employment to the at-home shopping surge.
If you had thought the pandemic would just be one year, or three, you could write the contract accordingly.
This is probably pretty hard for roles where it takes a while to get up and running, but not so hard for, e.g., sales and operations roles.
I personally would appreciate this because every 1-2 years I yearn for a long break.
Ah yes, let’s make peoples jobs even less secure. Why stop with two years? Why not just have everyone employed weekly and if an algorithm figures out they’re not worthy, off they go?
That would essentially be at will employment, our current system. “Stopping” at two years is an improvement from our current system because employment (or rather, a salary) would be a guaranteed via a contract. People wouldn’t sign a weekly contract like that if a 2yr contract existed elsewhere
People like to think that evil bosses will fire people for shits and giggles a la "Black Fridays" in Arrested Development, but finding and training people is such a hassle, the theoretical "you can be fired whenever for no reason" is rarely abused to that extent.
> the theoretical "you can be fired whenever for no reason" is rarely abused to that extent.
I used to think this way until it happened to me. The CEO didn't care that she was losing a senior technical resource because it wasn't going to be her job to replace me. She found out I was interviewing and fired me because she hated it when people resigned. It was so bizarre, but those people do exist.
I think in organizations where the loss of an individual with years of institutional knowledge is felt, this applies more.
Startup just acquired a competitor and doubled its headcount overnight? Who cares about retraining folks you want to fire after that? You have to reorganize the new merged organization anyways, what better than to realign salaries with existing budgets?
>>I personally would appreciate this because every 1-2 years
While you would, most of the labor sector would not. For me I explicitly reject fixed term contract employment, while on the surface it may seem more ideal, for me At-will employment through out my career has been pretty stable, and normally on the inside I can tell when layoffs are coming, and what segment so will be impacted so I can plan accordingly
You say "tours of service", I say "perma-temp", because that's what companies would do to make this a thing. Add a mandatory six month unpaid vacation (to keep up the legal fiction of them not being employees) and you have the dream of companies everywhere to underpay and deny benefits to their "temps" while never having to deal with formal layoffs because nobody was ever really "employed".
Most people want stability. Do layoffs if you need to, but cut once, cut deep, and as Shopify did here, do well by the folks you're letting go. (And then evaluate if you should change your hiring targets to prevent this in the future.)
> This is probably pretty hard for roles where it takes a while to get up and running, but not so hard for, e.g., sales and operations roles.
Aside from the manyfold problems that your ‘solution’ would cause or exacerbate, this shows a remarkable lack of cross-functional understanding. It’s generally assumed it will take 1-2 quarters for sales teams to ramp up, and even the good ones don’t hit their stride until a year in.
It’s also disrespectful to your customers to turn over their sales teams every year or two, as they have to endure 6 months of “I don’t know, let me find out”.
Ok, it’s just an idea, I thought it was relevant to the situation at hand — I don’t think it’s necessary to call my lack of ignorance ‘remarkable,’ I actually have worked before :)
The only way I'd accept a contract that was not 'contract to hire with a high chance of conversion' is at a significant premium to compensate me for the hassle.
They're still listing open positions for lots of engineering jobs, it kind of seems like for all the engineering jobs... https://www.shopify.com/careers/search
Curious if anyone with more context knows how to interpret that. The obvious one is that they didn't lay off and are still hiring like mad for engineering, but I don't know if that's the right read. Or they just haven't updated their job postings.
Or they actually have fewer engineering positions open than they used to even though it looks like a lot -- most of these positions actually maybe look like "tech lead" positions; it doesn't look like there are any/many standard/non-senior engineer positions open, and I think maybe there were a few weeks ago? Not sure.
I have no knowledge of the situation and don't work for Shopify, but having worked corporate gigs my whole life, what probably happened is very few people knew this was coming, and that group excluded the part of HR that hires people. So the posting remain up while the news comes out, but the roles don't get filled and the postings eventually removed.
Maybe they could assign some remaining people to fixing their god damn issue with ERR_INVALID_RESPONSE issue with Chrome that has been happening on and off for years
As I mentioned in several other threads over the past months. Companies will do whatever it takes to protect their stock price. Googlers will soon be presented to the chopping block.
Top execs are compensated in stock. Almost all turn around and cash out like a revolving door. They will cause hell to protect their upside over the short term.
Lately, I see such article titles that paint a 10% layoff as a "shake-up" or use some other doom and gloom language. But in business school I recall learning that a lot of companies have as their standard practice to prune off the lowest performing 10% every year.
That 'fire the bottom 10% rule' was true in the 80's and 90's and was pioneered by Jack Welsh at GE, and notably Microsoft did a similar thing with their 'stack ranking' system. It's a lot less popular in management today because it breeds a divisive and political employee base that is more concerned about saving their own jobs than productively working towards the company's goals.
How did they lose $1.47B on $1.2B revenue last quarter? Wow.
Personally, I haven't bought a single item from a Shopify store. I prefer Amazon because of prime shipping, reviews, and the ability to compare similar products with one single search.
I called it quits with Amazon after my last three orders:
- Received a clearly counterfeit product (not even a good attempt at a fake)
- Received a product that looked nothing like the description with a note included offering me a $10 Amazon Gift card for providing proof of giving the seller a 5 star review. I reported this to Amazon and no action was taken.
- My last order, the product never even arrived. No response from the seller despite repeated attempts. (In Amazon's defence, a refund was quick and painless once the 2 week waiting period ended)
In all of these cases, the sellers had thousands of 5 star reviews. I feel a turning point will come where Amazon will either have to do some major housecleaning to fix the gaming / fake reviews, scams, and counterfeit products that infest their entire business, or customers will reach a breaking point and leave en-masse.
I too purchase a lot from the junk bin that has become Amazon. Even still if there is anything I want to buy from the specialty retailer - it is almost certainly a shopify store. Probably dozens in the last year. They white label them fairly well.
Yea, 10% doesn't scream disaster to me. A couple % from low performers across the company, a couple % from underperforming parts of the org, a couple % from reducing long-term/optimistic investments, and Shopify can drop 10% and keep growing.
The layoff-consultant folks often say you can drop a third of a company and not see a major difference in performance. If Shopify were struggling, they might have seen if the consultants were right.
10% is pretty big actually for a public company not fighting for their life or with a runway, imagine 1 out of 10 of your coworkers gone, in addition to natural attrition.
That one isn't an accounting quirk. Nor is the wall that their sales growth just ran into. The pandemic pulled future results forward by many years, Shopify will suffer near-term accordingly.
lol Amazon is now more like Ebay than a store with their own inventory, as in the majority of sales come from shady third party marketplace vendors. If you think it’s safer it’s most likely because they’ve gotten very good at rigging reviews.
I can't think of an item I've bought from a store that was Shopify branded, but I know that a lot of big retailers online are using Shopify behind the scenes - Huel are, I believe Gymshark are - so unless you use Amazon exclusively (also entirely possible!), there's every chance you have used Shopify without knowing
I actually buy quite a bit from Shopify stores. A lot of products like personal care, zero-waste and sustainable products, etc, are on Shopify. Once you've seen one, the checkout flow is often recognizable.
Often these 10% layoffs are an excuse to get rid of people that are overpaid, aren't performing or dont fit very well in the organization. Some companies do it every year.
When you decide that hiring good people is actually a hard problem the most obvious solution is to stop trying, and just accept some bad hires in the org temporarily that you'll let go in the next round of cuts if they don't work out.
This actually works out fairly well for everyone - some people get hired and stay because they're good, some get hired and then dropped but they earn well and get a big name on their resume for their time, and the company eventually builds a stronger team.
I guess another strategy is to not hire a large amount of people. Companies like 37signals comes to mind. Obviously, this will not work for all companies.
Yep. People complain about social strata discrimination, leetcode interviews, blatant racism and sexism on hiring... Well, any real solution to those requires accepting a few bad hires and dealing with them later.
Otherwise people will always go into voodoo practices trying to avoid the inevitable failures.
The layoffs I experienced were explicitly about reducing size and cost of the workforce. Individual performance was a limited factor at best. This was the case at two different Fortune 500 companies.
The only thing saving many high performers was better understanding of the company direction. Meaning a lot of the good folks figured out the “safe” teams/organizations and transitioned shortly before the lay off occurred.
makes me think of my home town. built around a steelmill. always jobs being cut for any reasons. hope all those laid off will find a nother good place soon. one that keep them!
The bit that is viewable in the paywalled article indicates 1000 people will be let go and their revenues are forecasted to shrink as people go back to pre-pandemic shopping habits. I believe they were on a hiring binge last year to get 2000+ engineers. Any indication if the layoffs are just engineering or across the board?
"The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke. “We’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products,” he wrote. Staff who are being let go will be notified on Tuesday."
As the large majority (if not all) of this year layoffs in tech companies, engineering is barely affected.
> ”The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke.”
edit: Re-read the thread somehow missed that it was specific to engineering. Comment makes sense - engineering typically last to go for obvious reasons.
I'll counter though that I don't think its about pricey severances but more related to keep core products operating and being built for the future. Lutke comes from software engineering.
It made sense to me. I was and their reply was talking about engineering jobs.
I said that all these layoffs are not firing many, if any, software engineers. They replied that, while that’s true, tech companies are not firing software engineers, they are on a hiring freeze and canceled offers that were out. So not firing, but not hiring any either.
A hiring freeze for any one company generally means slowly bleeding in that area: people are still leaving, you're just not getting anyone new to replace them.
But if basically every company is doing a hiring freeze, and employees are unable or unwilling to quit because of bad economic conditions, maybe less so.
Wonder how much money & resources Shopify spent on all of their NFT features & integrations over the last months, how many people worked on it and how many of those are part of the lay-off now. I'd guess the support you'd need to provide for it and their tokengated commerce isn't little either.
Tobi removed all the NFT stuff from his Twitter profile and didn't tweet much about it for months now, after being pretty vocal about it until earlier this year.
Would love to hear his real thoughts on it and why he/they even (seemingly) invested so much into it. One of the few things I never got about Tobi / Shopify. Just seemed so late and weird to be so bullish there. Don't think he's the kind of person to push it just for personal gain, nor that he'd have to, but ...
We did some NFT stuff as well. Adding support for NFTs is not that hard to do. Some block chain contracts and some marketing. It definitely didn’t involve significant costs nor the reason for these layoffs.
The issue is the market growth that Shopify saw at the beginning of the pandemic is pulling back. And also we are likely entering into a recession which will also hit them. I am surprised they didn’t cut deeper.
> And also we are likely entering into a recession which will also hit them.
This is a key insight. The Shopify powered shops I buy from are luxury expenditure. The small producers who make nice stuff at high prices. The last couple of months I've been buying significantly less from them as inflation has cut into disposable income and, where I need a product, buying a cheaper alternative from eBay or Amazon.
If others have been cutting back extra expenditure like I have, that's going to compound the post-pandemic online shopping slump.
I was also disgusted and surprised by the NFT shit Tobi and Shopify pulled (still pull?). But I'd be surprised (again, lol) if they had more then a dozen people working on that stuff.
wasn't NFT issue but it was a signal. Shopify has some questionable metrics and its marketcap was very iffy as well as its business practices with partners from what I read.
spoiler: shopify isn't done yet with layoffs, it will go down as another Canadian failure (lots of those in this country)
I’m honestly still in disbelief at how many very smart people fell for the NFT trap. If you’ve spent even a single bull cycle in the crypto community you could tell right away NFTs we’re ICO level scams. The mental gymnastics very smart and technical people performed to rationalize paying for a jpeg still makes me question reality. I participate in crypto because I take a calculated risk, and I’m comfortable gambling. People who actually think something like an NFT has any real value still messes with my head. I really can’t grasp how they actually believe this. And yes, I understand technically how NFTs work.
I don't think they fell for anything. I think it's more likely that they saw an opportunity to make some money and had a loose enough moral compass to go through with it.
I kind of wish I kept note of everyone who took part in the scam. It will be easy to forget once everyone scrubs their profiles clean.
> I don't think they fell for anything. I think it's more likely that they saw an opportunity to make some money and had a loose enough moral compass to go through with it.
But even this means they fell for it. There’s very little money in providing access to NFTs in the short term. The money is made by dumping over hyped projects (ex: anything BAYC puts out).
What Shopify probably saw were the transaction amounts that OpenSea was doing, and thought they could jump on that business thinking it was any sort of long term model. They “fell” for it because they thought building a branch of their business out for NFTs was a good idea. Anyone could have seen this was a bad idea, and not a great way to make money, and also something that would die and fall apart in a few months.
I think Shopify did an ICO (or the NFT equivalent) for their own little cheap blobby avatar art. They sold thousands, starting bids at around 20k. So that was the play.
Yes, I believe they're two sides of the same coin. Buying an NFT did two things: A) it gave you the opportunity to flip it for a higher price (this is the most visible way that one can make money from NFTs), and B) it signaled to the crypto community that you were one of the tribe. The second was important if you wanted to execute your own trading scam, which many did.
I wasn't thinking of it as a public threat, more of a personal log of people who I don't consider trustworthy.
I unfollowed a lot of people over the last year who had turned to pushing scams. The problem is, my memory is short. I'll soon forget who the scam artists were, and, if they scrub their profiles clean, I'll probably end up following them again.
While I generally share your view of NFTs, I don't think your dismissal of them is really fair.
I think what it really boils down to is that, in the "real world", consumers are willing to pay many, many millions of dollars solely based on provenance. That is, one mediocre painting may be worth a couple hundred dollars, but if it can be validated that the painting was actually painted by some famous (dead) grand master, that painting is now suddenly worth millions of dollars, even though nothing about that painting has changed.
So, what NFT boosters were arguing was that, if people are willing to pay millions of dollars for provenance in the physical world, why not the digital world? In my belief it's that humans have evolved to view 2 distinct physical object, even if they are exactly the same, as separate - an exact copy of a painting so that it is indistinguishable from the original to the human eye would still be a different painting and not have the provenance of the original. For digital jpegs, we don't view them that way - the same image on two different monitors is "the same image". For physicists out there it's kinda like the difference between fermi dirac statistics and bose einstein statistics.
Thus, while I agree that NFTs are all scams, I think we should also be asking the question of why we are willing to assign so much value to provenance in the physical world - that seems crazy to me, too.
For physical objects, scarcity is an unescapable fact. It would be great if we could right-click on some Michelin starred chef's food and have another copy of it, but we can't.
NFTs unnecessarily add artificial scarcity to something that didn't really need it.
> For physical objects, scarcity is an unescapable fact.
I disagree. It is pretty possible now to create a replica of a painting that would be indistinguishable to the human eye from a distance of, say, 2 feet.
Yes, the object could still be distinguished by other means, but presumably the only reason we enjoy art like paintings is for their visual effect - there is literally no other reason to appreciate it.
So my point is that the scarcity for the reason we value it in the first place is actually not an inescapable fact for something like a painting.
Art is something we can appreciate the beauty of and for that alone, we don't per se need originals.
Arguably, however, someone wanting to own the original painting by a well regarded artist (say a van Gogh) you're stepping into Veblen goods territory[0] as its a display of wealth, status and prestige. This is what NFTs are trying to achieve
Paintings are one of those goods where we are able to make almost exact reproductions that, unless you get up close with a magnifying glass, are visually identical to the original.
The scarcity is not in the image itself, it is in a combination of image + canvas.
> For physical objects, scarcity is an unescapable fact.
But when we’re talking about very expensive paintings, the physical scarcity of the raw materials plays essentially no role in the valuation. Provenance is everything. Sure, the canvas and paint is scarce, but the cost of canvas and paint is vanishingly small. Make no mistake, provenance is the reason people pay lots of money for original paintings.
values of NFT is derived on the eagerness for the buyer to signal virtue. It's the same reason a gamer would spend $20,000 in purchases in game items/loot boxes.
Some of the value people associate with provenance comes from the mystery Ave human drama involved in establishing a provenance chain. (Think of Byatt’s Possession or the way a scholarly dispute raises the profile of a work of art.) Any digital record really drains the romance out of the whole process.
I don’t know if it’s provenance or attention. My gut says attention as many small NFTs projects start out with no provenance, and as the attention around the project builds, so too does the hype and price. This article is worth a read - https://cobie.substack.com/p/tokens-in-the-attention-economy...
Just the other day I was reading the EIPs for NFTs and other stuff, because at my work we were investigating the idea of using them.
I was surprised by what NFTs really are... it is so simple it is stupid. It is just some "standard" Solidity/EVM functions that you have to follow when writing your Smart Contract, and then it's an NFT. I don't know why I thought it was going to be something more complicated.
At the end we just made our custom Solidity contract tailored to what we needed. We didn't need the whole NFT functionality (we just needed to store a bunch of hashes in an IFPS file and "imprint" the hash of the file in a Smart Contract Key/Value map. Adding some authentication to operate the smart contract.
Because people typically believe any narrative associated with a rising asset price. “This person was early and bullish and has made money so they must understand it.”
The ill-informed association of wealth and genius are age-old and in many ways a necessary ingredient for a bubble to form in the first place.
The same is true on the way down by the way. People nobody listened to because they were incorrectly bearish in a bull market are suddenly entrusted. People who were bullish are disregarded. People believe any scary narrative associated with declining asset prices. This process plays out in a fraction of the time.
The conclusion must be that they're not actually very smart people.
Likely that a lot of these "smart" ceos are people that were in the right place at the right time that fortunately had hired the right people that drove their success. To them the internet was a golden goose. Maybe NFTs are the next golden goose? They're running on pure hopium trying to cargo cult their way into their next billion and not really understanding anything about how they got there.
Do you think they all fell for it or do you think some were just exploiting it?
I agree by the way, it's just I hesitate a bit because a lot of people speaking positively of NFTs were too smart to be mindlessly bullish. I suspect some of them thought it would make for positive press and drive some hype. Like with Elon and Bitcoin/Dogecoin. I'm convinced 90% of the stuff he says and does is to keep Tesla and himself in the news.
A lot of people were exploiting it, with one of the most egregious examples being Long Island Ice Tea, who apparently have been in trouble with the SEC recently too.
>I'm convinced 90% of the stuff he says and does is to keep Tesla and himself in the news.
The connotation that no news is bad news is just such a sad statement on the human condition. If you're in the news for wrong reasons with negative connotations && still maintaining an overall positive image, then WTF is wrong with people?
When a particular individual continues to be theirself in public like this, each instance makes me think less and less of them. It then starts to reflect on the compan[y|ies] they represent. I used to regard Tesla very highly, but no longer. The more they focus on FSD and stop progressing EV cars more in general, the less I care about Tesla. To the point now, I no longer consider them as a car I'd like to buy. I'm still holding onto liking SpaceX notwithstanding the CEO.
Worse than ICO. An ICO got you something vaguely resembling either equity or a Kickstarter-style prepurchase. Either way, an ICO had some plausible value. (None of that value had anything to do with blockchains, and the whole thing was probably fraudulent to some extent, but at least the potential value existed.)
An NFT is just an NFT and has no plausible way to be worth anything.
I had an acquaintance who spent a week or so learning about ethereum and NFTs, threw together a quick NFT site, generated some images and make nearly 500k in a weekend selling these to suckers.
I think he did believe in it, but that's independent of the fact that acting quick on this made him a good chunk of cash with very little effort.
Is that sustainable? of course not. It's also not my particular cup of tea as far as making money goes, but I would hardly say he's "not smart" for getting involved when he did and turning a quick buck.
If they truly understood the scam they’d know it doesn’t end where they win. So yes, they actually fell for it because they publicly participated in it.
You can be a winner if you're selling pickaxes during a gold rush, but less so if you're building a pickaxe factory. Shopify's NFT stuff was closer to the latter.
Because you don’t make money by selling access to NFTs. You make money by accumulating over hyped projects and then dumping them on bullish retail, knowing full well that in another 12-18 months that same jpeg will be worth nothing in the resale market.
Transactions on a few thousand NFTs per day is meaningless (yes volumes that low). So there’s no other option than Shopify actually believing NFTs were a real viable, long term business.
I like non-fungible tokens. The jpeg stuff made no sense but the composability/interoperability is awesome, making items in one application that anyone can integrate into their own applications without restrictions. One developer can make a game where you can destroy your items from other games without the origin game having any say in it. An open API that no-one controls.
Remember CryptoKitties? The first NFT game before it was called NFTs. Someone made a game where you bred dragons, but in order to do so you had to feed them CryptoKitties. That's the type of stuff I like, not the play-to-earn crap.
Associating falling for scammers with stupidity leaves yourself vulnerable through arrogance. Scamming happens to everyone.
The faster we collectively understand the above, the faster we can actually implement in solutions to do what we can to prevent scammers and also lift the shame from people who are victims.
Do you think the markets for art prints or sports cards are also scams?
Collectable markets behave fundamentally differently from utility good markets so it's often hard to reason about them when you try to apply logic from one type of market to another.
Nowhere in the article does it mention NFTs being at the heart of the layoffs. The article later says, "The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke".
No mention of NFTs, though wouldn't be surprised if they scale back on that. I _would_ be surprised if they drop support and development for them completely.
Some companies did work on NFTs because they believe in the space and think it's the next big thing. Some do it for marketing to say "look, we have an NFT story!" If you did it for marketing, there's no reason to advertise you spun down that initiative.
That’s not even the bare minimum they should be doing. If it was some democratic process to allow employees to leave voluntarily or vote about the direction of the company explicitly, I would feel differently. These matters shouldn’t be solely in the hands of owners.
Hmm, this statement, "Tobi Lütke, the company’s founder and chief executive, told staff in a memo sent Tuesday that the layoffs are necessary as consumers resume old shopping habits and pull back on the online orders that fueled the company’s recent growth." - sounds a bit bullshitty.
But maybe they expected the pandemic to last for the rest of our lives.
Did you read the article? The CEO admits straight up that he bet on growth, and failed.
The letter is actually very direct, with little PR speak. Generous severance benefits too. As far as layoffs go, it's way more responsible than normal.
Not really. This is the type of statement that would make the stock of the company drop further for the simple reason of being honest, transparent, and truthful.
I don't doubt it. Still strange to hear it. I think a number of the bigger companies tend to hire contractors for these kinds of situations. And the pandemic was/is definitely one of those situations.
Now, just don't tie those benefits to an NDA, and you'll truly be a company I'd look forward to getting fired from, Shopify.