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Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

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Re: Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

#431

Post by Beretta_Vexee »

stabbles wrote: post #154
Beretta_Vexee wrote: post #51

Earlier quoted context omitted.

For example, they bought the German hiking and cycling app Komoot. It's a mature app in terms of functionality, with a stable user base. There's little chance of hypergrowth with this type of app. It's also complicated to switch apps because transferring routes, collections, photos, etc. to another service is difficult. They laid off 90% of the teams. They migrated the app to their infrastructure to pool costs. Since…

> Since then, there has been no further development of the service. That's not true, the website and app both got a major redesign after acquisition.

It is mainly cosmetic and probably due to sharing resources (web template) with their other products. There are no new features.

Re: Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

#432

Post by WJW »

lumost wrote: post #354
rcxdude wrote: post #320

Earlier quoted context omitted.

The money comes from investors. Private Equity basically works by taking money from investors to buy companies and turn a profit with them, paying back the investors when they do so (it's a very illiquid and risky investment, so the advertised returns tend to be higher, but it does seem like a lot of firms are struggling to actually make it work).

Aye - it’s a simple business model, which seemed to work well in an era of low interest rates. However some of these tech buyouts seem quite myopic, making it almost appear like the goal was to shutdown the company.

You really seem to want to believe Bending Spoons buys companies just to shut them down, for reasons that are not entirely clear unless you believe that they're owned by a secret conspiracy made out of note-taking, file transfer and video hosting companies that is willing to engage in a multi decade plot to very slowly buy out competitors. They then shut down the acquired businesses for no clear benefit, even though they're still profitable and new competitors could easily start up. So this conspiracy (if it exists) would be very slow and not very effective in keeping down competitors, especially compared to all the other things the conspiring companies could be doing.

Each individual company Bending Spoons acquires has a limited lifespan, so if you only look at a single deal it can indeed look myopic. But the whole point of their business model is that they use the cash flow thrown off by the acquired businesses (which are much more profitable for a short while due to firing 75% of personnel) to fund the next acquisitions. This can keep going on indefinitely, or at least until there are no more businesses to acquire.

Re: Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

#433

Post by ymolodtsov »

array_key_first wrote: post #265
Nextgrid wrote: post #151

Earlier quoted context omitted.

> Software is never "finished" Software may never be finished (in your opinion) but the budget of any customer is finite. If you keep reinvesting your revenue forever into "engineering" the product there's going to be a time where a competitor comes in with a finished product matching your customers' requirements and snatches him from you by both charging less and making a profit.

The number of customers is, effectively, infinite though. YouTube continues to be engineered and continues to grow. It could have, realistically, been finished over a decade ago. But they repeated branch out into new markets with new features, and that seems to work from them.

But YouTube is still a growing and maybe a profitable business (they disclose its revenue but not costs).

Bending Spoons buys stalled or failed products and keeps them alive with a central engineering team in Italy which is far cheaper than anything in the US.

That's their business model. If the company you work for is acquired by them you should start looking for a new place.

Re: Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

#434

Post by csomar »

wavemode wrote: post #126
Nextgrid wrote: post #106

I am surprised so many people don't understand the business model of Bending Spoons or are bewildered by it. In conventional infrastructure and product development you need engineering staff to build the product; once the product is built you need very little engineering. If you build a house you don't keep the builders on payroll once it's built to keep "building" it - you may need maintenance staff but that's it -…

The economics are different because the industries are fundamentally different. Software is never "finished" the way a building is finished. More features can always be added to software. If those new features create new product lines and attract new revenue, then the software engineers' salaries are more than paying for themselves. But, this obviously carries risk, that the new thing you develop won't be worth as mu…

Buildings are never finished either that's why you have HoA fees and even with that many buildings end up in disrepair.

Re: Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

#435

Post by breakingcups »

MattRix wrote: post #328
tom_m wrote: post #317

Earlier quoted context omitted.

People use Vimeo?

They have a product where you can make your own whitelabeled video site, which is used by some popular services, ex. Dropout.

A notable difference to their (somewhat) contemporary, Nebula. Nebula made the choice to develop their own services, to also own the customer billing relation. Dropout relies on Vimeo for all that.

Re: Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

#436

Post by fnands »

varshith17 wrote: post #416

Bending Spoons' playbook: acquire established product, gut the team, run it on fumes with skeleton crew + AI tooling. They did this with Evernote, Meetup, now Vimeo. Classic private equity move dressed up as a tech company. Extract value, minimize costs, ride the brand until it dies.

> Classic private equity move dressed up as a tech company.

Kinda, more like a tech company using private equity tactics. Say what you want about them, but they do actually employ decent engineers, and the founders are all engineers.

They seem to fundamentally understand the companies they are buying (not always the feeling I get with PE).

Their business model is a bit cynical, but I would still consider them a tech company.

Re: Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

#437

Post by breakingcups »

johnnyanmac wrote: post #275
csallen wrote: post #238

Earlier quoted context omitted.

> These are already people with specialized needs that the main market leader (Youtube) cannot fulfill. Isn't this just a bigger reason why these people won't leave? Assuming the acquirer isn't dumb enough to remove the core benefit that comes from their highest paying customers, they will keep providing those, and those customers won't churn. And I think this is a safe assumption, considering it's the primary goal a…

My TLDR response here would be this: Vimeo isn't Evernote and people are paying a lot more to expect more. The nature of this means that smaller bits of "product rot" will push them away faster than what a consumer would tolerate. These are already people who needed to deliberately avoid Youtube, so they aren't afraid to migrate again if needed. There's also a lot more competition with Vimeo than there is with YouTub…

Since Vimeo owns the customer billing relationship in a lot of their whitelabel B2B business, migration would be a pain, especially when compounded by a massive amount of data needing to be re-ingested. I think those customers will tolerate a reasonable amount of rot before starting to move and that the timescales would be long.

Re: Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

#438

Post by Ekaros »

fnands wrote: post #436
varshith17 wrote: post #416

Bending Spoons' playbook: acquire established product, gut the team, run it on fumes with skeleton crew + AI tooling. They did this with Evernote, Meetup, now Vimeo. Classic private equity move dressed up as a tech company. Extract value, minimize costs, ride the brand until it dies.

> Classic private equity move dressed up as a tech company. Kinda, more like a tech company using private equity tactics. Say what you want about them, but they do actually employ decent engineers, and the founders are all engineers. They seem to fundamentally understand the companies they are buying (not always the feeling I get with PE). Their business model is a bit cynical, but I would still consider them a tech…

I think it is good to understand tech company and then startup or VC company.

Tech company is company with marginal unit costs. Bending Spoons aims these and then optimize them further.

Startup or VC, search "growth" and user acquisition. Usually in something with marginal unit costs.

Just because someone stops spending money on chasing growth does not mean they still don't have unit economics of tech companies.

Re: Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

#439

Post by senordevnyc »

wavemode wrote: post #294
Etheryte wrote: post #225

Earlier quoted context omitted.

I'm not really sure this argument makes sense. Plenty of software I've built is finished, it does the thing I need it to do and I haven't touched it in years. Adding features just because is not a useful way to spend anyone's time, doubly so in a business context.

> Adding features just because is not a useful way to spend anyone's time, doubly so in a business context. You could make this statement about anything. "Building a new hospital wing just because is not a useful way to spend anyone's time", "Adding an extra drive-thru lane just because is not a useful way to spend anyone's time". The point is that it's not "just because", it's because you believe it can grow your re…

What kind of hospital keeps a construction team on staff so they can constantly be building new wings?

Re: Tell HN: Bending Spoons laid off almost everybody at Vimeo yesterday

#440

Post by senordevnyc »

johnnyanmac wrote: post #370
f33d5173 wrote: post #141

Earlier quoted context omitted.

The businesses they acquire are ones whose revenue has not appreciably grown in many years. They are being sold because the prior owner does not believe they can improve the business any more. Any profit bending spoons earns they can run off and invest in another business if they like. They don't bother investing in the businesses they purchase because they believe, like the previous owner believed, that there is no…

>Any profit bending spoons earns they can run off and invest in another business if they like And the ones who helped make Vimeo what it is? left out in the cold to fend for themselves. This is why loyalty is dead. Maybe if this billion dollar aquisition benefitted the workers there'd be less hard feelings, but that's not how capitalism works.

And the ones who helped make Vimeo what it is? left out in the cold to fend for themselves.

This is such a bizarre mentality to me. When you sell your car, do you send a cut of the money to your mechanic?

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