Daily Archives: October 10, 2008

The Well Funded Layoff

Today Seesmic laid off seven staff members, after laying off three other members a couple of weeks ago.

They have millions of dollars in the bank and are well funded. Why would they do that?

Well, I went over and hung out with the remaining staff and CEO Loic Le Meur this afternoon to learn more and to try to discern the advice that Le Meur got and how many other startups are about to do the same thing. Here’s what I learned.

First, Le Meur has a really deep set of advisors. People like Pierre Omidyar , the founder of eBay and Martin Varsavsky founder of Fon.

They are telling him that the downturn will be deep and will be multi quarter. They told him it was a good idea to conserve cash and bunker down.

Translation: Le Meur isn’t the only one getting this advice. Sequoia Capital told its companies the same thing.

The thing is Le Meur is better connected around the world than most of us. He’s been seeing this downturn coming for months and has been tracking it, so he’s one of the first who is mentally ready to move. He told me that he predicts other CEOs will do the same thing over the next couple of weeks. Those who don’t, he told me, will be told by their boards over the next few months to take the same actions if the CEOs don’t make the hard decisions to do this today.

“But what if the economy turns back up in the next month?”

Well, Le Meur told me he just cut jobs that aren’t core to the mission of Seesmic. Designers. Marketers. PR. He told me all those functions are outsourceable and aren’t core to what they do. The folks sitting around the table were developers, people who kept servers running, who were directly responsible for keeping customers happy.

This is a smart strategy. First, it keeps people who are core to the mission happy because they know the CEO took steps to protect their jobs even if the world goes to hell. CEOs who wait until their hand is forced won’t see the same morale saving effect that Le Meur will see here. Second, it saves capital for potential acquisitions after other companies run out of cash and are forced to beg to be purchased the way my old company was (PodTech sold for a few hundred thousand dollars after having millions in capital pumped into it). Third, it saves capital for later when the storm clears and they will want to expand. Fourth, it gives them more time to find a business model since advertising is going to be a tough sell for a company like Seesmic right now.

But, Le Meur didn’t come to this decision easily. He literally teared up with me today. Being a leader and making really tough choices isn’t easy and this market isn’t easy to navigate for anyone.

My thoughts are with the workers who are laid off. How can we help you find jobs? Let’s have some innovative thinking about that too.

Who is next?

Pageonce: economic downturn winner?

Pageonce‘s CEO Guy Goldstein was on my WorkFastTV show this morning (the recording will be up on Monday, but I did a separate video with him afterward on Kyte.tv so you can get a sense of what his app does) and while we were talking he was reporting that he’s seeing a ton of usage BECAUSE of the downturn.

What does his app do? It’s an iPhone app (next week they are shipping on Blackberry too) that lets you watch all sorts of personal information. I call it a personal information dashboard.

Stocks. Bank accounts. Travel info. Restaurant info. And more.

You can see when your bills are due, what your account balances are, and more. All from your iPhone (it’s one of the top 10 productivity iPhone applications).

This is a three-month-old startup that shipped on the iPhone and already has 200,000+ users.

Seems to me this app, along with others from Mint and Billpay could be major winners as we pay closer attention to our finances.

What are other examples of apps that you are seeing winning in this economy?

Economic crisis hits home…

I’ve just learned I have a new boss and that lots of moves are being made by my parent company, Mansueto Ventures, which publishes Fast Company and Inc Magazines and also does a series of online sites, including Fast Company TV, which I head along with Rocky Barbanica. I also just learned that 20 of my coworkers have been laid off as the economic troubles start to move into the media world. Most of these cuts are in online and marketing.

I’ve been talking with people about these changes on my Twitter account and on my FriendFeed account, more to come as I learn more.

My new boss? Bob Safian who is the top editor at Fast Company magazine. I’ve worked with him and his team on my column so this is actually a good news because it brings our videos closer to the magazine.

Ed Sussman, my previous boss, is leaving to join a startup as CEO. I’ll let you know more as his startup comes out of stealth mode.