Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Weaveworks is shutting down

linkedin.com

Post reply on HN
Print view View original

121–130 of 266 posts

Re: Weaveworks is shutting down

#121

Post by mech422 »

softwaredoug wrote: post #50
mad_vill wrote: post #13

I feel like the next generation of this type of company is smaller consultancies that have awesome developers that build customer tooling on the side. But the main revenue driver is consultancy. Also it really feels like all the air has been let out of the docker/kubernetes/cloud-native balloon that was so popular in the late 2010s.

"Smaller consultancies" are actually really hard. Especially if you want to deal with larger companies with the type of $$ to pay for consulting. Instead of doing the work you love you end up in procurement and payment hell.

God, sales and collections suck ... and Net 90 can be a killer for smaller shops (and big clients tend to expect Net 90)

Re: Weaveworks is shutting down

#122

Post by streetcat1 »

ssharp wrote: post #119
KaiserPro wrote: post #103

Earlier quoted context omitted.

> According to the CEO's linkedin post, they were basically trying to keep up appearances of being a 200 person company until some greater fool bought them out, which appears to have failed. Because that is what startups do. 80% of startups that are "successful" follow this pattern You shoot for the moon, if you don't take massive risks, then you won't be rewarded. It sounded like they were about to be bought out or…

"Shoot for the moon" seems like a reasonable strategy when you're making the investment. However, certainly at some point while they were burning through that $36 million it became evident that "moon" was no longer a viable destination. Why wouldn't everyone be aligned with making the adjustments needed to get back to default alive? Something is clearly better than nothing. Now if it got to the stage where the CEO no…

Because this is not what the VC wants. The VCs are diversified across many startups and frankly make most of their money from tail event startups in their portfolio (e.g. Uber / Facebook). Since they don't know which startup will be the tail event, they don't want a profitable business, but a max growing business. This is different from the bootstrap model.

Re: Weaveworks is shutting down

#123

Post by burningChrome »

propter_hoc wrote: post #83

I know this isn't the craziest startup shutdown story, but wow. At $10MM of revenue they can afford to keep a staff of 50 at a fully loaded cost per employee of $200,000. Yet, according to Linkedin they peaked at nearly 200 employees. On top of this, they appear to have raised $36 million three years ago - https://www.weave.works/press/releases/weaveworks-raises-36-... In other words they somehow were running at a lo…

>> How do you find yourself as Board member or CEO of a company like this and not think to cut expenses a little sooner?

I've worked at several startups who never cut costs, meanwhile they're burning through cash faster than an incinerator at the local trash company. I had one company CEO who remodeled our entire offices, got sky boxes for all the local sports teams (there were four of those) and made a point to tell all the devs they're the highest paid startup devs in the city.

I found out later, our CEO also had a pissing contest with another startup CEO on the same floor of the building we were in. Both companies had over $200M in VC money, and both were trying to outdo each other with the lavish lifestyles they were living on the investors money.

The other company put on a massive "release" party to announce their internet software to the local tech new media. Apparently they blew close 10 $2M on it. Limo's for all the employees to the five star hotel ball room, a red carpet VIP entrance for all the employees like you see on those awards show, some 70's rock band played, and it was open bar all night and they reserved an entire floor of rooms in the hotel where the bash was thrown. Two of the devs told me afterwards, "Dude, totally not my scene, and none of our team were cool with this at all."

Less than two months later, both companies ran out of money, quietly shut their doors and closed down.

At a bar across the street, we had a group of devs from both companies sitting around lamenting what went wrong, where we were going to next, and reminisce about both companies.

We all reached the same conclusion:

>> According to the CEO's linkedin post, they were basically trying to keep up appearances

Re: Weaveworks is shutting down

#124

Post by sleepybrett »

stackskipton wrote: post #48
edoceo wrote: post #2

https://www.weave.works/ "Operate and Manage Kubernetes easily" / "GitOps Automation for Kubernetes Stacks"

Probably most popular thing they built was FluxCD if you are confused where you have heard their name before. Their company provided a ton of extra tooling and consulting around the product. Hopefully as FluxCD user, this doesn't impact the development of Flux.

People like the weave network policy controller too.. at least in the earlier days of kubernetes, their cni was pretty popular for awhile.

Re: Weaveworks is shutting down

#125

Post by paulryanrogers »

streetcat1 wrote: post #122
ssharp wrote: post #119

Earlier quoted context omitted.

"Shoot for the moon" seems like a reasonable strategy when you're making the investment. However, certainly at some point while they were burning through that $36 million it became evident that "moon" was no longer a viable destination. Why wouldn't everyone be aligned with making the adjustments needed to get back to default alive? Something is clearly better than nothing. Now if it got to the stage where the CEO no…

Because this is not what the VC wants. The VCs are diversified across many startups and frankly make most of their money from tail event startups in their portfolio (e.g. Uber / Facebook). Since they don't know which startup will be the tail event, they don't want a profitable business, but a max growing business. This is different from the bootstrap model.

Then why not sell it as a viable business? Or would it be too costly to trim it back and execute the sale?

Re: Weaveworks is shutting down

#126

Post by wheels »

ssharp wrote: post #119
KaiserPro wrote: post #103

Earlier quoted context omitted.

> According to the CEO's linkedin post, they were basically trying to keep up appearances of being a 200 person company until some greater fool bought them out, which appears to have failed. Because that is what startups do. 80% of startups that are "successful" follow this pattern You shoot for the moon, if you don't take massive risks, then you won't be rewarded. It sounded like they were about to be bought out or…

"Shoot for the moon" seems like a reasonable strategy when you're making the investment. However, certainly at some point while they were burning through that $36 million it became evident that "moon" was no longer a viable destination. Why wouldn't everyone be aligned with making the adjustments needed to get back to default alive? Something is clearly better than nothing. Now if it got to the stage where the CEO no…

> Something is clearly better than nothing.

That's not a major component of venture backed startups. For a company that has already been written off as a failure, often the board members that represent the VC would rather not have to stay involved and keep showing up for meetings -- they could be elsewhere; there's an opportunity cost.

Re: Weaveworks is shutting down

#127

Post by gtirloni »

paulryanrogers wrote: post #125
streetcat1 wrote: post #122

Earlier quoted context omitted.

Because this is not what the VC wants. The VCs are diversified across many startups and frankly make most of their money from tail event startups in their portfolio (e.g. Uber / Facebook). Since they don't know which startup will be the tail event, they don't want a profitable business, but a max growing business. This is different from the bootstrap model.

Then why not sell it as a viable business? Or would it be too costly to trim it back and execute the sale?

It's about perspective.

What to you (and pretty much anyone else) looks like a business that just needs adjustments to reach profitability, to the VCs it's profile maintenance work for little relative benefit in the long-term. The chances of that company turning 10-20x profits in the next few years is basically zero and they just cut their losses (in their view).

Re: Weaveworks is shutting down

#128

Post by girvo »

ssharp wrote: post #119
KaiserPro wrote: post #103

Earlier quoted context omitted.

> According to the CEO's linkedin post, they were basically trying to keep up appearances of being a 200 person company until some greater fool bought them out, which appears to have failed. Because that is what startups do. 80% of startups that are "successful" follow this pattern You shoot for the moon, if you don't take massive risks, then you won't be rewarded. It sounded like they were about to be bought out or…

"Shoot for the moon" seems like a reasonable strategy when you're making the investment. However, certainly at some point while they were burning through that $36 million it became evident that "moon" was no longer a viable destination. Why wouldn't everyone be aligned with making the adjustments needed to get back to default alive? Something is clearly better than nothing. Now if it got to the stage where the CEO no…

> Something is clearly better than nothing.

To you and I, this is patently obvious. This is not true however for VCs. In a lot of them, they'd prefer you fail entirely rather than limp along making 1x, 1.5x their investment. Zeroing out is preferable sometimes, weirdly.

Re: Weaveworks is shutting down

#129

Post by superb-owl »

propter_hoc wrote: post #83

I know this isn't the craziest startup shutdown story, but wow. At $10MM of revenue they can afford to keep a staff of 50 at a fully loaded cost per employee of $200,000. Yet, according to Linkedin they peaked at nearly 200 employees. On top of this, they appear to have raised $36 million three years ago - https://www.weave.works/press/releases/weaveworks-raises-36-... In other words they somehow were running at a lo…

No to be pedantic, but payroll isn’t 100% of cost. Plus cash flow issues, sales volatility, probably declining revenue as you scale down…my guess is the headcount should be more like 20-30. And that might not cover their personnel needs if a lot of their revenue relies on services and customer success (which is usually the case for OSS companies)

Re: Weaveworks is shutting down

#130

Post by girvo »

wg0 wrote: post #102
propter_hoc wrote: post #83

I know this isn't the craziest startup shutdown story, but wow. At $10MM of revenue they can afford to keep a staff of 50 at a fully loaded cost per employee of $200,000. Yet, according to Linkedin they peaked at nearly 200 employees. On top of this, they appear to have raised $36 million three years ago - https://www.weave.works/press/releases/weaveworks-raises-36-... In other words they somehow were running at a lo…

>According to the CEO's linkedin post, they were basically trying to keep up appearances of being a 200 person company until some greater fool bought them out, which appears to have failed. That's probably pretty brutal summary of most of past two decades I guess? Also, had it been bootstrapped, might have a different outcome, could scale down, pivot while staying a small profitable shop.

> That's probably pretty brutal summary of most of past two decades I guess?

Longer. This has been the main playbook even going back to the '00s!

Post reply on HN