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Weaveworks is shutting down

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Re: Weaveworks is shutting down

#171

Post by esafak »

marcinzm wrote: post #115
gk1 wrote: post #89

Earlier quoted context omitted.

Maybe it was edited later, but the post now says "(>$10M)". I interpret that as $10–19M. That's not great for a product that's been around for 9 years. I consulted a similar company in their space ~5 years ago. What I found was that the way to make money in K8s automation/monitoring is to position it as a security solution. That's what Snyk did and they've been killing it, reaching $7B valuation as of last year. Both…

I've been thinking about this for a bit. Productivity is a hard sell for a company that is tech focused. Since a client basically can't measure the impact there is little external difference between a true solution and a fake solution. As a result even if you convince someone of the value a company that focuses on marketing to those paying the bills will win out against one that focused on building a better product.…

If you can't measure the benefit, why would you pay more for security? Just get the cheapest thing that checks the boxes...

Re: Weaveworks is shutting down

#172

Post by kensey »

sleepybrett wrote: post #124
stackskipton wrote: post #48

Earlier quoted context omitted.

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.

That was my first recollection -- after CoreOS' Flannel, I think the next two (or at least two of the earliest) overlay networks available for Kubernetes were Weave Net and Calico (whose core maintainers started Tigera). Flannel is still around and under active development despite CoreOS being long gone; hopefully the tools Weave employees maintained can keep healthy communities going around them.

Re: Weaveworks is shutting down

#173

Post by rjzzleep »

lesam wrote: post #158
girvo wrote: post #128

Earlier quoted context omitted.

> 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.

Do you have any sense why this is true? I get preferring (10x or 0x) to (1.5x). I don’t get preferring a near-certainty of 0x to some recovery of their capital with a pivot to selling a smaller-but-sustainable business. Is it something like they’re measured by LP’s (or someone?) on only non-zeroed investments?

Don't VC companies basically gamble with other peoples money? So yes, the person that actually put the money into the fund might want 1x or 1.5x out over 0x, but for the VC firm it doesn't matter, right? It's not their money to begin with.

Re: Weaveworks is shutting down

#174

Post by nullspace »

mcherm wrote: post #165
axiak wrote: post #117

Earlier quoted context omitted.

If they received $36 MM in a fundraise 3 years ago, you better believe that those investors put pressure on the business to grow fast or die trying. Those investors are not looking for a somewhat risky medium % return, they're looking for each company to have a small % chance of being a unicorn.

So who out there is running an investment fund that's looking to make a much more reasonable rate of return off successful but slowly growing companies? Because I would put money into that fund.

Assuming you’re asking in earnest I would begin with S&P 600 Small Cap companies, and see how they got their starts. These are all profitable companies with various levels of earnings growth and indebtedness.

Also commercial real estate fits your criteria almost perfectly.

Re: Weaveworks is shutting down

#175

Post by kensey »

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.

Small consultancies also tend to fall into the trap of having one client (often their first client) that they utterly depend on the money from... but who doesn't depend on them to be able to survive. That customer almost always knows the relationship is unbalanced in their favor (sometimes they went into the relationship specifically because they knew it would be that way) and they will run you ragged with unreasonable requests, burning out your staff and ruining your relationships with other clients because you have to keep them happy so they keep writing checks (and then you're even more dependent on them, as a rancid little bonus).

The only way out is to either gut your way through it till you grow enough to be able to push back without risking your existence; detect that things are going that way early and fire them as a customer before it ever gets to that point... or keep burning out staff till you can't find fresh faces, then close up shop.

Re: Weaveworks is shutting down

#176

Post by bigstrat2003 »

girvo wrote: post #130
wg0 wrote: post #102

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. 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!

Right... So, two decades ago. ;)

Re: Weaveworks is shutting down

#177

Post by PeterisP »

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?

When it's still enough runway to trim it down, there's often still some hope of greater success - and a VC investor might believe that it's more valuable to have a 1% chance of it becoming a unicorn or a few percent chance of arranging some last-minute buyout, rather than pick up the 100% certain but low price it has as a non-growth business based on its revenue.

Re: Weaveworks is shutting down

#178

Post by ShamelessC »

Can someone please explain what this company actually did? I’m not a cloud person per se, but I find it strange that I’ve never heard of them given the overwhelming number of people here who are familiar.

Re: Weaveworks is shutting down

#180

Post by senderista »

PeterisP wrote: post #177
paulryanrogers wrote: post #125

Earlier quoted context omitted.

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

When it's still enough runway to trim it down, there's often still some hope of greater success - and a VC investor might believe that it's more valuable to have a 1% chance of it becoming a unicorn or a few percent chance of arranging some last-minute buyout, rather than pick up the 100% certain but low price it has as a non-growth business based on its revenue.

Yes, due to their large bankroll and diversified position, VCs can afford to be risk-neutral and only care about expected returns. Founders and employees obviously cannot be risk-neutral, ergo startups are a great bet for a VC and a terrible bet for anyone else.
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