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Comment by deft | Hacker News Reader

Reading this whole article and it isn't until the end you find out what Domo even does. Can't believe they've built an 800million deficit this quickly. Besides the wasteful expenditures described in the article, where is the money going? This isn't like Uber where they have to spend to grow. They are a software-only company.

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They are a BI dashboard company with lots of data integration connectors. They've been burning money with ads declaring 'spreadsheets are dead' and silly Domopalooza[1] lifestyle events

[1]https://www.domo.com/news/press/domopalooza-2016-to-feature-...

[2] https://www.domo.com/news/press/kesha-joins-the-domopalooza-...

[3] https://globenewswire.com/news-release/2018/02/15/1349133/0/...

>silly Domopalooza[1] lifestyle events

Reminds me of a particular west coast startup I was associated with that took its final round of funding and blew most of it on a massive out-of-town party. Flew in all of the A-list bankers and tech types it could find.

The idea was to make the (failing) app look like a huge deal in the eyes of investors and get bought, thus fulfilling its exit strategy.

It worked.

Is the identity of this startup a secret? Maybe someone with a throwaway account could post it? Super curious here...

FWIW I had a startup as a contract client that sounds like they did something similar. Spent hundreds of thousands throwing a "relaunch party" to pander to investors. I assume this strategy is not rare. Only difference is that it didn't work for them and they went under a few months later.

Pied Piper?

>where is the money going?

$1.8m leasing a jet from the CEO and $300k on catering from a restaurant owned by the CEO and his brother is part of it, according to FT Alphaville (free, but registration required):

https://ftalphaville.ft.com/2018/06/05/1528193040000/What-is...

Did you even look at those numbers? That's a drop in the bucket compared to $800MM. Very curious myself as to how that breaks down.

The issue is not the amounts, but the flagrant self-dealing.

Sure, but that stuff is ubiquitous in the biz world, it's just not usually done so flagrantly as you say. So it's not as interesting to me as the GP's question, how in the holy heck can a brand new company run through $800MM in 3 years?

If this is routine, then shit, I'm wasting my life.

Josh James got immediate and easy buy-in from investors because he founded Omniture, a $1B+ exit. So you'd probably need at least one successful exit to get this much leash. Presumably, investors will start to watch much more closely if he can't make good on Domo.

> Did you even look at those numbers?

Please give me the benefit of the doubt as per the forum guidelines.

$1.8 million dollars on a private jet isn't exactly a standard expense for a tech startup. The profligacy is compounded by the fact that the CEO also apparently owns the jet, which suggests a conflict of interest in the lease.

Smells like plundering and bad governance to me.

Did you even look at those numbers?

One might safely assume that parent did just that, given the detail of what they posted.

How do people pulling down six figures a year (in somewhere other than SV) not have any money at the end of the month? One $4 latte and NewEgg impulse buy at a time. I get the impression that you're looking for the big ticket item(s). Maybe there isn't one. Maybe it's just one $1.8MM jet rental at a time. $1.8MM for jets + $600K for catering = $2.4MM. Do that about 350 more times and there's your $800MM. And I'm dead serious about the 350 number. I'll bet they pay too much for payroll because "only the best and brightest", the in-house gym with state-of-the-art equipment didn't come cheap, the $100K espresso machine, and on and on...

Man, if people really are going to be this blasé about it, I guess it really is a routine occurrence.

I don't know if I'd say I'm blasé about it, but incredulous I'm not. Now, this is one of the more egregious examples, probably why it's in the LA Times. And $800 MM is a number that would take some effort to blow on stupid shit. So if one were to ask, "how on earth did they manage to spend...", as you did, I might not be able to give you an exact accounting, but I can make some educated guesses along with being not at all shocked by their spending.

Having attended BYU and lived in the Utah Valley area for a while, I can say they were pretty extravagant. They have tons of billboards, many of which don't even really state anything about the business or the product. Just stupid, meme-like quips. They also would come to Career Fairs with 3x as many reps as any other company, most of whom didn't seem to really know what roles they were there looking for, and had tables of all sorts of Domo-branded swag.

In general, the company itself kind of felt like a caricature of the ridiculousness sometimes found in tech these days. Kind of reminded me of the character Richard Hanneman from Silicon Valley.

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