BuyWithMe Lays off More Than Half of its Employees • Hacker News Board

Re: BuyWithMe Lays off More Than Half of its Employees

#11

Post by wiradikusuma » Thu, Oct 20, 2011, 5:04 AM UTC

oacgnol wrote: post #7

It just doesn't seem like there's any room in the market for Groupon and all of the me-too startups. The business model for most of these companies don't seem to add up in the long run either.

i'm curious, how is it that this business model not sustainable? isn't that being "broker" is always profitable? basically they're just middlemen between merchant and customers right?

Re: BuyWithMe Lays off More Than Half of its Employees

#12

Post by abbasmehdi » Thu, Oct 20, 2011, 5:20 AM UTC

I don't get why startups go into acquisition binges, trying to buy their way to the top rather than out-innovating the competition. It is really sad for the poor folks laid off, and this seems like it was run purely on greed rather than any kind of desire to do something awesome. (Sorry, do I sound like a hippie?).

Re: BuyWithMe Lays off More Than Half of its Employees

#13

Post by agotterer » Thu, Oct 20, 2011, 5:23 AM UTC

wiradikusuma wrote: post #11

oacgnol wrote: post #7

It just doesn't seem like there's any room in the market for Groupon and all of the me-too startups. The business model for most of these companies don't seem to add up in the long run either.

i'm curious, how is it that this business model not sustainable? isn't that being "broker" is always profitable? basically they're just middlemen between merchant and customers right?

Not if you raise $21M, acquire 6 companies and have over 100 employees.

Re: BuyWithMe Lays off More Than Half of its Employees

#14

Post by nradov » Thu, Oct 20, 2011, 5:31 AM UTC

So what, it was just a lame MLM scheme anyway. They weren't doing anything even remotely interesting or innovative.

Re: BuyWithMe Lays off More Than Half of its Employees

#15

Post by radiant1 » Thu, Oct 20, 2011, 5:37 AM UTC

Great companies focus on their products and understand that their employees are a key part of the team. Passionate employees will work their tails off for something they believe in. Too bad the CEO wasnt passionate about the employees or actual products.

Re: BuyWithMe Lays off More Than Half of its Employees

#16

Post by jprobert » Thu, Oct 20, 2011, 5:39 AM UTC

bproper wrote: post #4

The reckoning is clearly coming on this industry (daily deals / group buying). Just look at Groupon cutting their IPO in half today. But the way this happened is really terrible. They laid of tons of people with no warning and no severance. They did not have to try and raise more money at a ridiculous valuation. They could have taken a flat to down round, stopped buying other little companies, and tried to make it wo…

Groupon cut their IPO by more than half to $10-11b from $25-30b. If you think its bad that they laid off 75% of their employees wait until Groupon has to lay off a good portion of their 10k +- sales force. Through being in the business, understanding Groupons financials and the market I have a hard time believing they are worth more than a few billion. The market requires a large on the ground sales force (expensive) and huge marketing expenditures to keep and gain new customers who are not loyal. Groupon may be better off pivoting into some sort of social network as they do have >100mm subs. What about Living Social? Their recent valuation was in the billions but not hearing much about them.

Re: BuyWithMe Lays off More Than Half of its Employees

#17

Post by jprobert » Thu, Oct 20, 2011, 5:42 AM UTC

abbasmehdi wrote: post #12

I don't get why startups go into acquisition binges, trying to buy their way to the top rather than out-innovating the competition. It is really sad for the poor folks laid off, and this seems like it was run purely on greed rather than any kind of desire to do something awesome. (Sorry, do I sound like a hippie?).

It's the Eric Lefkowsky model.. Grow as fast as possible at an unsustainable rate in an unproven market and take be money and run.

Re: BuyWithMe Lays off More Than Half of its Employees

#18

Post by [deleted] » Thu, Oct 20, 2011, 5:42 AM UTC

abbasmehdi wrote: post #12

I don't get why startups go into acquisition binges, trying to buy their way to the top rather than out-innovating the competition. It is really sad for the poor folks laid off, and this seems like it was run purely on greed rather than any kind of desire to do something awesome. (Sorry, do I sound like a hippie?).

[deleted]

Re: BuyWithMe Lays off More Than Half of its Employees

#19

Post by william42 » Thu, Oct 20, 2011, 6:52 AM UTC

jpdoctor wrote: post #8

bproper wrote: post #4

The reckoning is clearly coming on this industry (daily deals / group buying). Just look at Groupon cutting their IPO in half today. But the way this happened is really terrible. They laid of tons of people with no warning and no severance. They did not have to try and raise more money at a ridiculous valuation. They could have taken a flat to down round, stopped buying other little companies, and tried to make it wo…

> The reckoning is clearly coming on this industry (daily deals / group buying). With more folks predicting recession (eg http://www.channelregister.co.uk/2011/10/18/gartner_recessio... ), I doubt it will be just this industry.

I thought we were still in a recession.

Re: BuyWithMe Lays off More Than Half of its Employees

#20

Post by wlievens » Thu, Oct 20, 2011, 7:27 AM UTC

william42 wrote: post #19

jpdoctor wrote: post #8

Earlier quoted context omitted.

> The reckoning is clearly coming on this industry (daily deals / group buying). With more folks predicting recession (eg http://www.channelregister.co.uk/2011/10/18/gartner_recessio... ), I doubt it will be just this industry.

I thought we were still in a recession.

A recession has a well-known definition.