Patreon Lays off 17% of Staff
blog.patreon.com
blog.patreon.com
> We’re waiving the one-year equity vesting cliff for all departing employees so that everyone has an opportunity to be a shareholder, regardless of your tenure. [...] All departing teammates will qualify for an extended option exercise period of 5 years, and we have extended it to 7 years in regions where we are legally able.
It must be jarring to be on the receiving end of a layoff. In the grand scheme of things, a laid-off employee surely has bigger things to worry about... but I still think what they did here with the equity, especially the option exercise period, is a nice touch. Not many companies do this sort of thing, but they should.
Not only that, all former employees are de-facto "background check references" / "evagenlists" / "detractors" of your company. Forever! (well, not exactly forever... but close enough)
I can't recall a single year over the last 10 years where younger engineers, cousins, nephews or friends have asked me about the 2 companies I worked at before.
And boy, have I been candid.
Talked a very good friend of mine from joining Amazon for an offer he got making nearly 3 times much I did. All because of "decency" (or lack thereof) of a company.
Is this supposed to be haven't?
https://retailwire.com/discussion/there-might-soon-be-no-one...
I actually went out of my way to make it easy for my employees to quit. If they didn't want to stay, then I sincerely wished them well.
The company limited what I could do, but I did my best, and it seemed to work out.
That said - I've held off on any criticisms around their strategy/execution for the moment (aside from that) since it's unclear what happened. I'm wondering if Patreon is getting hit with lots of people backing off support of artists after a big jump due to the pandemic.
Given inflation and a lot of feelings of uncertainty around the economy, it wouldn't surprise me to learn that their revenue went way down in a hurry this year.
I back four artists on Patreon, down from five a year ago. In all 4 cases I'm either too busy to get full "value" out of sponsoring (e.g., I don't have time to read the updates or listen to all the demos), or there's not really any benefit other than funneling money to support the artist in hopes they'll continue working as an artist.
Each month I look at the bill from Patreon and wonder "do I really need to keep spending this money?" So far I've elected to - but I haven't been hit super hard by inflation or a layoff like many folks...
You're right!
That said, by the time a company is large enough that 17% of it is more than 17 people the kind of startup organization you have wisely and correctly nodded to will have ceased to exist.
So while you are right in that such scenarios have, do, and will continue to happen there's perhaps cause to wonder if that's really the best way to characterize replacing a security organization with specialists with a bunch of engineers who are likely quarter-time security at best. It's akin to firing all your engineers because the sales people can do a little bit of coding each.
Not really. A lot of stuff having moved to services, a lot of stuff being handled in 'no code' manner have simplified organizations a lot these days. Today you can just offload a lot of things to SaaS vendors that can automatically handle those stuff. Instead of having to have entire teams dealing with it like how it was in the earlier decades. You just need a host of capable people to deal with those services on your side, by wearing various hats. So the 'startup format' seems to have become extended to larger organizations.
Everyone should note the companies that do brutal layoffs with little/no severance. It's a major red flag because it shows incompetence and/or a lack of ethics.
Good for Patreon to go beyond the 60-day mandated period though
[0] https://edd.ca.gov/en/Jobs_and_Training/Layoff_Services_WARN
How many times have you been laid off?!
It's pretty easy to get laid off a lot if you work in startups. You join and know there is a ticking clock in the background. If you don't, you probably should.
Every startup thinks they are the 1 out of 10 (because why wouldn't they, you have to.)
This depends on where you worked. Most of the developers I know were around for the dotcom bust, but only 2 have experienced a layoff. But none were working for dotcom companies.
In the first layoff I knew the company was planning a round in the next 18 months and I'd been there 6 years. I waited around for the payout. Layoff law in Australia is more favorable to the employee, the payout was 10 months. I took a week off before starting the next job on a substantial salary increase.
The most important is not to take it personally as a failure. That can mess with self confidence and interview performance and general well being. At my HR interview they had the team there and some "transition coach" they seemed worried about us. I was actually thrilled as I planned to leave anyway.
The "2022 financial crisis"? That's not even a thing. Slowing economic growth and even a recession, should we enter one later this year does not constitute a "financial crisis."
There has been no "redefining" nor is it a recent phenomenon nor does it have political roots. You are wrong on all accounts.
It doesn't have political roots. The National Bureau of Economic Research(NBER) is a private, non-profit, non-partisan research organization with an aim is to promote a greater understanding of how the economy works.
The nonpartisan panel, which was established in 1978 by former Ronald Reagan adviser and NBER president Martin Feldstein, has gone out of its way to keep politics out of the process.
The committee meets in secret and doesn’t announce its gatherings in advance or even in retrospect, unless there’s a press release declaring a formal decision.
And it typically takes the panel about a year to decide on a recession call, though some decision have been made in a few months while others have taken almost twice as long. That’s almost always well after a recession has been widely recognized by Wall Street.
The committee has never reversed a call.
Rather than two negative GDP readings, the NBER is looking for a substantial decline in activity over a sustained period of time. The committee sets dates of the peaks of economic activity and troughs based on six monthly data series, including nonfarm payrolls, personal consumption spending and industrial production.
It's pretty spectacular though that not only have been able to declare that were in one but you are also able to comment with confidence on how bad it's going to be be.
Saw the writing on the wall for each of those and left before I was the one laid off.
I worked in an industry that's highly cyclical and had major consolidation over the last decade (HDD/SSD storage). We bought several companies and they would do layoffs roughly every 18 months or so.
It's the nature of playing around in the high stakes startup world. As I've gotten older I've found more stable companies. But it was quite funny coming home once every few years to tell my girlfriend I was laid off again and then picking up another job a week later.
Despite not knowing Jack personally pretty much everything I've seen from him over the years has reinforced my generally high opinion of him. In this case as well. As lay-offs go Patreon seems to be trying very hard to do right by their employees.
Don't mistake that for being a good CEO. He gives deep-felt apologies every time he does layoffs... which he does frequently. Often because he just doesn't like what people are doing. He also frequently communicates with the public in a more heart-felt manner than he does his own employees. He's great at putting out a great face.
- 5 days ago - Security Team - https://techcrunch.com/2022/09/09/patreon-security-layoffs/
- 2021 - https://www.protocol.com/bulletins/patreon-lays-off-36-emplo...
- 2020 - https://techcrunch.com/2020/04/21/patreon-lays-off-13-of-wor...
- 2019, September layoffs (can't find the links for these ones)
- 2019, June layoffs
- 2018, June layoffs
Also, to be clear. I was not one of the ones laid off. But I did see my entire team besides my manager vanish one day and then be told I'm expected to do the team's work for the next 6 months.
Patreon has a great mission though and I can see how it would attract creator-focused team members. There are some impressive Patreon alumni in their own right.
This is "mid", as my friends have started to say
Edit: I read the link and it appears to apply to RSUs as well. What I said about options is true but RSUs, different story. I’d sell those for sure.
Why do you think that?
It doesn’t require ‘very, very good luck’ for most companies shares to not collapse.
If you work for a big company like Oracle or IBM your options have cash value no luck needed.
What? These are public companies; short-dated OTM options have > $0 value only in volatile markets. But these companies don't pay employees in options.
But it's not all that great. Patreon is not publicly traded, so it seems likely that exercising any options will require cash up front, plus it will immediately trigger taxable compensation (income tax plus FICA). And how will the FMV be determined, if there is no public market trading? (ans.: usually just some number voted on by the board). It may well be that the options are never worth anything even after the extended period.
It is clear that these are not ISOs (statutory options), because statutory options by law only allow up to 3 months to exercise after employment ends.
Layoffs suck but I found the extended exercise windows and other benefits to be rather pleasantly responsible given the situation.
They are likely NSOs and with an extended exercise period the former employees do not need to exercise them. They can just hold them and if within 7 years there is a liquidity event, they can exercise & sell. The taxable event would only be upon exercise, so in the case the former employee just holds the options (which is almost certainly what they’ll do), there is no immediate tax impact, nor any sadness about the options expiring. Upon a future E&S they’ll have taxes to pay but also money from the sale to pay the taxes.
Yes the situation could be more complicated if the person were trying to optimize the tax situation but I think that is very unlikely to apply in this situation. Just hold the options and be happy.
And really PopAlongKid, why are you so critical when you really have not even a basic understanding of how this works?
And if Patreon is acquired some day rather than going public, the employee shares are probably going to be last in line after all the VC money (preferred share classes), and maybe not worth anything. I went through this when I worked for a dot-com startup in the early aughts. Even if they do go public, there will probably be lock-up periods to restrict the immediate selling of shares, and then you are at the mercy of the stock market, where the value of the company (which you long ago stopped having any input to) could well put your shares into loss territory.
It's not a unique benefit, many companies offer the extended exercise window, but it is very good for employees because otherwise they have 90 days to exercise or abandon the options.
In your mind you are imagining somebody with a few options that are barely in the money. What if somebody who got laid off has worked there for 5 years and is sitting on super valuable options. With no extended window they'd be in a huge pickle where they'd either have to abandon all their options or pay a huge exercise/tax bill right now. But with the extended window they don't.
Neither of us can predict the future of patreons valuation so you shouldn't assume things are going to go badly and thus this benefit will not matter. The whole point of stock options is the option part of it. Maybe it will be worth a lot, maybe it won't, but you'd like to wait and find out and shouldn't have to give that up because you were laid off.
Incorrect. Yes, one would not exercise options that are already underwater, but once you own the shares and there is a post-IPO lockup period[0] you most definitely can lose money on the shares, money on which you already were taxed at ordinary tax plus FICA rates. Try looking at the volatility of company share prices in the period immediately after their IPO.
>you really have not even a basic understanding of how this works?
You also have not addressed the strong possibility of being acquired rather than going public. (Ex-)employees do not make any money until after all the VC people do, and there may not be much left.
Again, I never said this was a bad thing, more like a "meh" thing.
[0]https://www.investopedia.com/ask/answer/12/ipo-lockup-period...
Yes preferred share classes exist, this is irrelevant to whether or not the options have option value! I'm not guaranteeing that Patreon stock will be worth a lot of money, only that it might be worth a lot of money.
Yes, sure, they have to dilute the company a bit by creating more stocks for the people buying it, but if your company is in enough trouble that you're laying off 1 in 6 employees, it seems financially wise to effectively be doing many small rounds of fundraising this way. It extends your runway some small amount.
"Hi everyone - I have some sad news to share: today, Patreon is doing a layoff of about 80 employees, about 17% of our team. This was ultimately my decision, so I wanted you all to hear directly from me about the reasoning.
Before I do, I want to say two things: first, today will be painful for many people, and I am deeply sorry to the incredible teammates who will be leaving Patreon - they are good, kind, creator-first, exceptionally talented, and smart people.
And second, I remember how nerve-racking it was when I was a full time creator - before starting Patreon - to watch companies that I depended on go through moments like this. So for those of you who rely on Patreon for your business and communities: I want to assure you that the company is making this move precisely for that reason - so we can continue to be a rock for your business.
As the world has recovered from COVID lockdowns and entered a broader economic slowdown, it has become clear that the original plan we built doe he year, to support outsized growth through the pandemic, is no longer the right plan for the company.
I take full responsibility for choosing that original path forward, and for the resulting changes today, which will be so difficult for our team.
It's important to me that we continue to deliver for our creators and patrons with new features and products like native video, new content creation and organization tools, a wold-class mobile experience, and new ways for creators to grow their membership and strengthen their communities. To ensure that we make progress on that roadmap, we are increasing our investment in product, engineering, and design, which means decreasing our spend on other ares of the company.
Ad difficult as this is fo our team, I know this is the right thing to do for Patreon, because it ensures that the company maintains a position of strength, even through an economic downturn, while continuing to deliver for our creators.
If you want to read more about this decision, I just published the internal note I sent to our team this morning, and it's linked in my bio. I'm going to stop posting here for a while to be 100% present internally for our teammates at the company. But I promise to come back in a bit - I will see you all soon.
- Jack"
Underrated dynamic in the startup layoffs this year. Many software companies grew headcount rapidly in areas outside of prod / eng in 2021 and are now scaling back those roles while preserving the talent that was extremely difficult to hire.
What does "take full responsibility" mean? Is he laying himself off instead of the employees? Is he paying the employees he's laying off out of his pocket? Is he resigning so this doesn't happen again?
I'm confused how you can just say "I take full responsibility" without actually taking any responsibility. It seems like the laid off employees are taking responsibility.
The laid off employees are the ones ultimately worse off by the outcome, that goes without saying, what you're missing is that this is different from being morally or strategically responsible for why the situation played out this way. That's the ownership the CEO is trying to take.
If I told someone "we'll be working on this report til the cows come home", I wouldn't expect that it's necessary to explain that the expression doesn't actually have anything to do with cattle, and instead just means I'm expecting this to take a long but indeterminant amount of time. If someone found it clever to point out what I _actually_ meant, I wouldn't find their input very helpful, just socially unintelligent and annoying.
Usually it's more helpful to just research what an expression means, rather than trying to argue about what you personally think it _should_ mean.
"Taking responsibility" (taking care of the kid) of condom breaking is a bit different than "taking responsiblity" (doing absolutely nothing of substance) in corporate world.
Your observation that words being said in the corporate world may be interpreted differently than in the bedroom is not a meaningful one and just comes off as uneducated, if I have to be honest. Communication in the corporate world is often deliberately vague, congratulations on your groundbreaking discovery.
Some of You May Die, but that is a Sacrifice I'm Willing to Make
The knee-jerk "oh yeah you should quit if you feel bad!!1" reaction is ill-informed and boring, but unfortunately very predictable.
The next CEO is more responsible with the money. If you earn high, stakes should be high, else there is no stopping from making decisions that are harmful to all the parties: investors, employees and the company itself.
Taking personal responsibility and resigning fixes lots of things.
>>oh yeah you should quit if you feel bad
He should quit for making wrong decisions, for which he had many many weeks to months to deliberate upon. And also had the choice to not continue with the bad decisions for nearly the same time if not more.
During covid lawmakers cut their own salary by 20%. A little bit of honor in a culture when ordinary people are taking hits goes a long way, rather than lipservice and PR.
1. We are laying off underperformers to strengthen the company (Has happened)
2. We are laying off poorly performing divisions (again, indirectly foisting the responsibility on the employees, because their division is underperforming)
3. We are laying off to cut costs and keep the company profitable (This may be the truth, but it treats employees like they are replaceable cogs in the machine they can throw out and bring back in any time).
4. Making the employees quit by themselves by creating toxic work environments (recently, forcibly enforcing back to office rules to shed all employees who cannot make it back or prefer remote).
5. Just layoff without any reason, not worrying about the mental health of the leaving employees or the ones who remain.
Just owning up his responsibilities means, the relieved employee atleast does not have to add the stress of "did-I-do-something-wrong" to his/her list of woes. This can sometimes be debilitating.
It also adds to the confidence of the existing employees that the company will do right by them, if it comes to letting them go in the future.
Ideally, no one should get laid off. But companies cannot be forever profitable and the government or no other body is going to bail them out. Considering that, this seems to be a more mature way of handling a terribly difficult situation.
In this ideal world of yours, are people allowed to quit?
As you spend more time in the industry, you see lots of badly handled layoffs and some better managed ones. You hear the stories of other veterans and learn a little more.
At some point you realize it is something everyone inevitably goes through and just a part and parcel of working in the private sector. You learn to plan ahead financially and mentally to handle such surprises.
Nowhere here do I talk about quitting (other than in the context of the forced one),
I've been through a bunch of layoff, and most of them are steeped in legal noise, mainly because in the UK layoffs need to follow a legally proscribed route. so the explanations are normally a lot less honest.
I think something got lost along the way there.
Taking full responsibility mean taking a pay cut or stepping down or basically taking consequences for yourself first before others have to.
The non-corporate speak translation would be “I tried my best to make this company bigger and more valuable, but it didn’t work. Some of you will now need to be sacrificed, but not me!”
Full responsibility is a samurai killing himself painfully while his best friend cuts off his head to end his suffering. That's full responsibility.
This is, "I fucked up guys, here's 3-6 months pay and some benes... my bad. And yeah I know I fucked up last year too, but I took full responsibility then as well, so it's all good..."
And... I suspect whatever he's doing is also affecting him emotionally/mentally, and... to some extent career-wise. Taking these sorts of public steps may make it harder to be entrusted to CEO someplace else in future. Given patreon specifically, I doubt he's planning to leave and go CEO someplace else, but overall, there's no easy outs in scenarios like this. He'll be getting second-guessed and pilloried regardless of what steps he takes.
Better yet, refuse to take a bonus, not that the board should award one. If the board awards one anyway, contribute 100% of it to helping laid off employees.
It doesn’t mean much in the grand scheme of things but it’s just that he is claiming culpability for all of the ills patreon is experiencing.
Is it possible to be "laid off" for performance reasons?
For example "The bottom 10% of salesmen by sales volume"
A company finds itself in a situation where it needs to reduce headcount for reasons. Do you a) just role the dice and randomly pick who goes? or b) Have managers rank their performers and use it to get rid of the lower performers or protect their most valuable people? In a case like this is means some variation of "you're too expensive for what you do for us."
https://blog.patreon.com/a-note-from-jack
3 months' of pay + longer depending on tenure at the company. Healthcare until the end of the year. Mental care up to 6 months. They contracted a placement company to place the laid off staff to other companies in the sector. A lot of those people will already get hooked up by a company within a week or so, even without the placement company being able to take action.
This looks as decent as layoffs go.
We don’t know everyone’s unique situation, even if they did go beyond what most companies do.
What we also don't know is the companies financial situation. Keeping people on when they can't be afforded can be a way to make a company completely collapse. I was in two startups that would have collapsed completely, without layoffs, around the time of the last recession. This is why the "keep x months of salary" are rules you strictly follow.
This is besides Patreon giving their former employees a license to goof off on their dime for 3 months. I can’t imagine anyone at Patreon being so hard up that 3 months pay and insurance to look for new work is enough to break the camels back.
Recognizing the impact of an action does not mean you're entirely responsible for it.
Those who are hired to Patreon and similar companies arent people who would end up unemployed if they are laid off. Those people already have to turn down recruiters who try to poach them every week.
The slowdown comes from all the moving parts who need to be in place in order to facilitate the transition of an employee to an org.
Think of your average tech hire who needs to (a) go through orientation just like everyone else, and (b) is going to take a week or two just to get his work environment and credentialing set up so he can work with the servers. I'll put my experience on that side of the desk working with dozens of clients against any anecdotal one-offs who got hired late in the year.
A polite reminder that some companies are growing really fast and are even struggling with hiring.
Most people in tech also don't live paycheck to paycheck. As an adult, your responsibility is to have an emergency fund. No career is safe.
They're making more than $15/hr: https://www.levels.fyi/companies/walmart-global-tech/salarie...
I didn't even say it was impossible. I just think it's unrealistic to expect to find something after Nov 15th and until the New Year. Sorry for knowing what I'm talking about, I guess.
Also, I think it's quaint that people assume that when labor reductions happen at tech companies, that only tech employees are affected. Somewhere there's an admin assistant who has been working at that glorified CMS, and I doubt they have the same job prospects as a software architect.
https://www.youtube.com/watch?v=MV-3GgU6rlo
It seems to be what most CEO are saying lately.
This is why I will never be a CEO. I'd just come right out and say, "17% of you are expendable and I had your jobs replaced by scripts and a few machines. I'm going to use that money to buy more machines, hire more brilliant engineers, and see what percentage of the company I can replace by next year."
If you're able to automate a large portion of your workforce, why wouldn't you? You'll be rewarded for it in every aspect. You'll be praised by the Board of Directors for cutting costs and improving productivity (since algorithms and robots don't have to sleep, never get tired, never call in sick, never get drunk and shit in their husband's bed, etc.). You'll be praised by Wall Street as a "visionary, technologically-minded thinker / leader".
There's zero downside for you.
There's enormous downside for parts of society.
The difference is, I'm willing to admit that when I do this, it's directly to my benefit.
Have you considered that part of the fabric of civilized society is...being civil with the people that you interact with, and require cooperation from?
You can hold any opinion of them that you like, but the difference between a competent manager and an incompetent one is how they can translate their personal disdain for their direct reports, in a way that doesn't treat them like cogs, and improves their performance on the things they're responsible for.
What makes someone a competent manager is whether or not they complete their assigned tasks and projects that come down from above.
You don't like people who are direct and brutal in their feedback. Got it.
Hell, you can turn back the clock to 2004-2008 World of Warcraft and see this for yourself. The best guilds in the world had leadership that was brutally forthright - bordering on downright cruel - to their membership, but they still managed to execute, because when everyone's goals are aligned, you'll be surprised the shit people are willing to entertain. And not only were these people not being paid, they had to pay to play the damn game!
And yes, I know the analogy doesn't map perfectly onto work for several reasons, but the crux of the idea is there: a harsh taskmaster can move mountains with a little bit of fear (I'll replace you with a shell script if your performance doesn't improve) and a lot of honesty.
In the future, you could save us both a lot of time and effort by just saying, "I don't like this management style."
But I've seen it in video games, I've seen it in startups, I've seen it in Fortune 500 companies, and I've seen it in the military. Properly implemented, it works wonders.
It was fine when I was an external developer, but when I switched over to an in-house role it sucked seeing the fear in departments that I turned my gaze to :(
It means "I'm not blaming anyone else for this". Which might not mean much but it's probably better than the alternatives.
Maybe this is just a language thing, but in my world "taking responsibility" involves some action to personally shoulder the pain of the layoffs beyond saying "my bad". I'd expect it'd at least begin with resignation in this case. Just like you can't just announce "I declare bankruptcy" to shrug off debts.
I'm astounded that so many supposed seasoned leaders were out there making crazy projections around maintaining covid levels of growth and I also don't think 'my bad' is enough in that context, but benefits above what's required are rarely handed over without someone committing to fighting for it.
Responsibility
Being responsible means being dependable, keeping promises and honoring our commitments. It is accepting the consequences for what we say and do. It also means developing our potential.
People who are responsible don't make excuses for their actions or blame others when things go wrong. They think things through and use good judgment before they take action. They behave in ways that encourage others to trust them.
People who are responsible take charge of their lives. They make plans and set goals for nurturing their talents and skills. They are resilient in finding ways to overcome adversity. They make decisions, taking into account obligations to family and community.
This guy literally made excuses for his actions: "broader economic slowdown"
"To ensure that we make progress on that roadmap, we are increasing our investment in product, engineering, and design, which means decreasing our spend on other ares[sic] of the company."
So it's not even a money issue. They have the money, they just want to spend it on servers and other people.
And finally, just so we're clear, I don't take umbrage with his decision and his plan for his employees. Hell, it's admirable, frankly. I take umbrage with his words. He's not taking responsibility. Responsibility means he'd cut his pay as much as necessary to keep these people because he misjudged the market and where it's headed post-COVID-19 lockdowns (since there is no such thing as 'post-COVID-19' - it's here forever now).
This is pretty classic example of wanting to have the best of all possible worlds.
"I want to be lauded for my graciousness. I want to be lauded for taking responsibility. I want to be lauded by my investors for a plan that grows the company."
That's why this is a load of horseshit. He's trying to please everyone. I have no doubt he probably agonized over this decision - I really do not; but he made it, and that means there are certain consequences with which he must live, one of those is that it should be clear to his employees that they will always take a backseat when the economic times get tough.
I was under the impression we were addressing "Jack"'s claim to responsibility. I wasn't trying to comment on the actions of the company (which I fully admit is more compassionate in its layoffs than other companies would be).
Not that this was said in this particular case so directly. This is just a general thought.
How is funding so tight that cutting the 1% of money going to these people is going to make all the difference? It's not even a total 1% gain, there will be some lost productivity making it somewhat difficult to measure.
If you truly tried everything, couldn't the CEO or other executives take a tiny cut? Not that I expect them to, I'm just saying if they truly did everything within their power to prevent it, like is often said.
I mean, sometimes I give a significant amount of my salary, like 10% as donations / tips / handouts and expect nothing back. These aren't even people I did something bad to, like forgot to pick up when I said I would, or felt guilty for spilling food on their carpet.
Surely in situation where I messed up and caused a problem for someone, I would do whatever it takes to make it right. I wouldn't just say "Well, that's what you get in this system of inviting friends over. I'm not technically required to do anything. I guess there's nothing I can do (including picking up the mess I caused or paying to have it cleaned)"
I've seen similar large donations from people who truly struggle to pay for rent and food even be similarly generous. Sometimes people will live on limited food or delay getting an apartment if it means helping out an acquaintance.
If you make millions of dollars, you don't need to worry about these basics. You'd think it'd be easier to take a personal hit which probably will have actually 0 impact on your life (literally no change-- keep on golfing, vacations, etc), rather than supposedly living with the guilt, as is frequently said, of people struggling to survive because you wanted to save 1% of your company's money for a few months (before realizing you need to hire and retrain people from scratch.)
> it'd be easier to take a personal hit
Jack Conte, the CEO, was not previously wealthy (that we know of). At this stage he might be getting paid very well, maybe even in the mid six figures, but definitely not spending $8M/year on golfing to make that a viable alternative to layoffs.
Reading the thing I pay for is fucking _painful_ on Patreon. So is trying to use their comment system to interact with the creator or other fans. Everything is slow-loading infinite scroll with tons of "load more" links. It is absolutely dreadful and every time I interact with the site I'm reminded that I really should cancel my subscription.
The experience has not meaningfully changed in years.
They can pay all the lip service they like but Patreon sucks at connecting creators to fans/subs. Their content presentation sucks. Their search sucks. Their comment system sucks.
Whatever they are doing they aren't making the service more useful to the people forking over the money.
Right now afaik it's only available for select partnered creators, but I hope the end goal is to make it available for any server that wants it, and truly compete with Patreon that way. We will certainly accept pledges that way. It'll be a huge hassle cos no one will want to cancel Patreon so creators will have to do updates in two places etc but I imagine most people will want to move to Discord.
The alternative in this monthly subscription digital sculpting space, MyMiniFactory, is also not great, but it's eating Patreon's lunch by not being actively hostile to the subscribers. (Well, a bit hostile. I need to use an adblocker. But they have $1M funding or less [compared to $473.3M], so I can make some allowances here.)
0. myminifactory.com 1. cults3d.com
I ended up automatically forwarding emails from Patreon to my RSS host, and that mostly works. Sometimes I don't get an email, sometimes only one of multiple images is included, and recently they started cropping images in the email (and stopped after a bunch of people complained)
This caused me to stop subscribing to new ones altogether
Was there no better place to link to?
https://blog.patreon.com/a-note-from-jack
"but as the world began recovering from the pandemic and enduring a broader economic slowdown, that plan is no longer the right path forward for Patreon"
So basically, they overhired to meet demands during Pandemic and now as less people are using the platform (??), there is no need for the 17% of people. Interesting.
Pretty decent IMO.
>You’ll also receive COBRA health care coverage through the end of the year.
Odd that that doesn't match the pay period, but oh well.
Everybody did, even anticipating that the move to online economy would slow down after the pandemic.
But nobody predicted the Ukraine war, sanctions, and the economic effect those sanctions made back in the West.
1. Start a company that does a thing well
2. Hire enough people to do the thing well
3. For some reason, hire more and more people to do more and more random things
4. Hire more managers who hire even more people
5. You are now a complicated mess and can't get anything done
6. Run out of money
7. Fire people and write a sad post. Continue to collect hefty CEO salary.
Why not just stop at 2?
Because your investors will never allow that. And without their money, you cant even reach #2.
I don't know if it's the right business call, but Uber is like 10 different companies now.
1) you won't attract any follow-on investment capital;
2) your original investor will be angry that you're sitting on a pile of money that is doing nothing;
3) you will likely grow slower than your other competitors. in some markets, this is death, in other markets, this is fine.
Patreon had nearly 500 staff before layoffs. Now has about 400 staff. You may have a hard time understanding what all those people do, but I suspect they're all quite busy.
That's just not how VCs work. Basically it's you HAVE to always show hockey stick growth.
Steady 5-10% per year isn't good enough. It has to grow exponentially. So that's why you keep hiring and keep spreading out the service into a whole bunch of other areas.
I'm guessing 100 managers at least. Busy hiring more people to staff their perpetually understaffed teams, each doing some disjoint initiative.
The danger is when a startup seeks to grow just for growth sake. Hire way more people than we really need so we attract investors by showing rapid growth is their modus operandi. That approach has actually worked enough that many companies are willing to travel that risky road. But that road is also littered with casualties.
You don’t need VC cash to start a successful company but the time horizon is much longer.
This is interesting, and I'm not entirely convinced. It seems as though their security team was not warned and you would expect a handover process.
> The change last week was part of a longer-term strategy to continue distributing security responsibilities across our entire engineering team
> Unfortunately, the change generated concern that we were reducing our security investment, but I wanted to make it clear, especially in light of today’s changes, that we are in fact increasing our investment in security.
This doesn't sound like an increased investment, it sounds like a decreased investment. "Why are we paying these people when we can just get the normal engineers to do this?". Maybe this is possible, but who's going to allocate sprint time to work on background pentesting and documenting?
You may say "we will get an external team to do this", but will they get access to source code? Will they get access to upcoming features?
> You may say "we will get an external team to do this", but will they get access to source code? Will they get access to upcoming features?
Most likely yes in my experience.
Neither feature testers (does it behave as expected) or security testers (is it secure as it does it) are expected to write fixes. Writing fixes needs to be planned in the sprint and is better worked on by an expert on that system.
> they're hiring a small number of security engineers (maybe even one) to not only actively look for security issues, but to also actively work to remediate them and improve code security posture as well.
If this is true, it could seriously affect their ability to ensure the system remains secure. Sometimes a security issue will take a long time to hunt down, and perhaps require a large rewrite to deal with it. Whilst this person is dealing with this, they are no longer looking for new issues.
I'm just not sold this is anything but a cost cutting exercise, and could (theoretically) lead to bad practices in the future.
...on teams that are structured that way. That is far from a universal thing.
But, yes, I'm with you that it could be just cost cutting or something weird with the team pushing back on some things. As I said, I have no idea, but there are universes where it makes sense to make those changes.
This video of execs at Patreon apparently turning a blind eye to employees calling out patreon users that were selling images of underage children: https://twitter.com/TizzyEnt/status/1315626557688483841?s=20...
They also laid off their ENTIRE security team: https://techcrunch.com/2022/09/09/patreon-security-layoffs/
I have no inside knowledge as to whether this was the case at Patreon; no opinions about Patreon whatsoever. But re-orging security into and out of engineering is not unprecedented.
1. Censorship which caused a market reaction for more competition, and the first mass exit of the platform
2. Changes in the Fee Structure and billing policies, this caused the 2nd mass exit from the platform
3. Platforms getting better at internal monetization (i.e YT SuperChat and memberships)
There has been little advancement of of the patreon platform, and with more and more competition from other direct compeitors (subscribestar, etc) and different monetization avenues (TeeSpring,etc) there is little reason for creators to use patreon outside of the network effect, and since they are not growing that effect is smaller every day
I don't understand why they thought that move would benefit them. I don't understand how Jack Conte is still CEO after such a stupid change or how he can say with a straight face that he's "taking responsibility".
Does Only Fans have any non-porn content? I really don't know because in my head Only Fans is a place for porn.
A summary:
* mark horny stuff as 18+
* all horny posts must be patron-only
* drawings are okay but no photos/video of actual people going at it
* no bestiality, rape, kids, incest, necrophilia, or dubcon/noncon
As a creator of horny art I do not look forwards to the day when Visa/Mastercard/Apple/Google/etc leans on Patreon and says "hey we banned all horny content, you can either ban it too or you can quit working with us".
1. Make a way for people to get paid over the Internet for making stuff.
2. Be okay with horny stuff, possibly as an explicit choice in the beginning, possibly as a pivot when people who make horny stuff start shifting a lot of money through the pipeline you're providing.
3. Get big enough for Visa/Mastercard/Apple/Google to notice that you sure are pushing a lot of horny money through their payment systems. Which have a lot of clauses that basically boil down to "no horny".
4. You have a choice here: figure out how to work completely outside of whichever payment system's owner is saying "no horny", or ban horny. I've never seen anyone take the former option.
5. Make a wishy-washy blog post about how you are banning horny stuff that completely fails to come out and say "this really sucks and we hate to do it but we can either drop our horny creators and keep existing as a company, or we can pretty much pack up the entire affair; here are some ways you can go put pressure on Visa/MC/Google/Apple/your lawmakers/etc to maybe change this state of affairs for the next people to follow this path, seriously this is 100% happening because V/MC/G/A finally noticed we have been blatantly skirting these rules".
This has happened many times before, and it will continue to happen many times in the future until someone chooses "fuck all existing payment processors, we're finding a new way to get money from customers to creators" and makes it work.
From your post, you make it seem like OnlyFans cannot possibly exist. It does, and therefore Patreon could have built it.
OnlyFans could exist, sure, but like every other horny service ever it had a built-in time limit. When Visa/MC/Apple/etc notice how much porn money you’re doing, then the axe falls. Maybe you continue without the porn. Maybe you fold up. Either way all the pornmongers leave and look for a new way to get paid. In a few years they will be doing this again.
Patreon could have built OF, in theory, but this would require them to have more than the vaguest interest in actually building anything new. I’ve been using Patreon to get paid for my art since a few months after they launched and this is not a thing they have. I’m not sure they even actually have anyone who can do backend development any more. Mostly they just fuck up the front end every few years.
As to why, Patreon was ALSO the organization most apt to sniff the size of that market. Those were their current customers! If OnlyFans managed to glimpse to potential revenue and build their platform, Patreon would have been aware.
They had the platform, they had a known brand, they had relations with some of the clients, they knew how many people they were kicking out. This was such a huge advantage over anybody else.
Patreon and Patreon Red or something, where one is adult content only and the other is not.
I can only hope that if my organization has to lay people off, they'd be half as kind as some of the recent ones have been (and not at all like others, such as Klarna).
Their new engineering staff could fix that, for one.
My card didn't automatically update and I can confirm that the site gets weirdly broken.
It's the same pattern at so many other companies now. Over-hiring during COVID (thinking what exactly? that people would forever stay locked up at home with nothing else to do with their money?), before waking up to the reality that things have gone back to normal and that there was never really a plan whatsoever for those hired. Asses were put in seats though, so there's that.
Imagine Patreon's position during early covid: they had a firehose of money pointed at them. I'm sure they knew it will end, but not "when". They had to react to it, if for no other reason than to prevent a competitor from getting ahead.
I wonder if this was Bay Area tech elite bias. Between the Bay Area being late to reopen and generous remote working options, decision makers might have planned for growth that matched where SF in the pandemic, but hadn't realized that most of the country had already moved on.
I would have sent the invite out beforehand to avoid the entire companying spending the next ten minutes in complete uncertainty about their futures.
https://twitter.com/wbm312/status/1567974063578185728?s=21&t...
That’s like a single person saas.
And of those, how many of them can only do that because they're outsourcing most of their needs to some other company people regularly complain is bloated?
Being over-staffed is different from "one person can run this as a saas business"
Teams, Google's VoIPs, Skype, Ventrilo, TeamSpeak, Zoom
Enterprise pays the big bucks but also has way higher demands from support, higher expectations about downtime, and all the third party integration requests. It has to integrate with Jira, it has to integrate with Google Calendar, it has to integrate with this niche service that changes their API every month and doesn't care your contract with Dairy Queen relies on this integration working.
It's not specifically about avoiding enterprise, it's about them recognizing what sort of business decisions are sustainable with small team capabilities. Enterprise chat adds a TON of requirements and harsher penalties for mistakes.
In Patreon's case, it's one of those business models that a small team just cannot survive in at scale.
Sure, storing some payment data in a database and charging a payment API once a month in a job queue is a weekend project. But then you get your first email about a stolen credit card being used. And one from Disney lawyers about how someone is using their Patreon account to sell Disney intellectual property. And an email from FBI because someone is using it to sell illegal images. And from creators whose account got hacked and all their payments redirected to a new bank account. Or the subscribers who want a refund because they're unhappy. Or the people who realize that if you say your credit card was stolen, you can access the exclusive content from any creator and get a refund the next day.
Plus, they had a small team, but I met most of them back in the Hammer and Chisel days and they were already a 20 person team at that point at least.
I'm not at all trying to say you can't have a good product with a small company. It's the incessant "I could do this myself in a month. I won't actually do it, but I totally could" responses. Almost every company you've heard of isn't getting by on single-digit employees, let alone one very smart person.
Better product
Of course, that's also the reason why a tiny company can't just replace Patreon: it's not the tech that matters. It's the marketing and other people stuff that you just can't handle with a small team.
It's not a good sign that Patreon is doubling down on engineering and eliminating the positions that actually bring in revenue. That's a sign of a poorly managed company not understanding its value proposition. Keeping extra engineers on staff to create yet another cryptocurrency isn't going to save Patreon, but the absence of the two dozen plus marketers and account managers they just fired will be acutely felt as they go into the holiday season.
Their discovery is pretty awful too. My understanding is that they're mostly viable because there's no easier way to solicit money as a podcast/youtube channel right now.
On discovery: Tiktok, for example, is absolutely slaying Insta, Snap, and Twitter. Tiktok uses human curation; the other 3 use an algorithm.
Note that Patreon takes a % of all transactions, so the key driver is increasing transactions. They don't need fancy new tech for that; they need more human interaction.
> I can't think of a single large software company that doesn't regularly draw internet comments of the form “What do all the employees do? I could build their product myself.”
Products are nearly always more complicated internally than it appears to the user. Indeed, often the very ease of use that you see as an end user is because of higher complexity on the inside.
Just SCALE ALONE is enough to expand a group of engineers a significant amount. A personal project is fine to run 1 AWS or Digital Ocean instance to run the application, database. But global distribution that has to support tens of thousands, hundreds of thousands, or even million+ users concurrently globally? It's a big orchestration of applications and services that requires much larger teams.
Add in payment services and managing those integrations. Then, given that you're a global company and have to operate in multiple countries you have all sorts of regulatory compliance requirements. Who oversees that? Who manages all of these requirements? Not a single dev or a small team.
On the other hand
How much friction there's between decision makers and people writing code in those companies?
How much time is wasted on meetings, teaching new people every month, etc, etc?
Sorry, but I really can see scenerios where 5 skilled engineers with domain knowledge can outperform 25-50 that need meetings to agree on everything
Sounds like a fantastic service to use for fraud or money laundering. It would be a shame if you had to dedicate a ton of employees towards preventing that. ;)
And their response is not so great: https://support.patreon.com/hc/en-us/articles/4553920132877-....
I'm sure the layoffs are not entirely related, but having this stance didn't help.
I don't question it, but I most definitely question how many of these companies blindly hired these people without spending a second thinking about consequences of their actions. Shopify was recently in the news for the same reason[0].
I keep getting surprised by that. Companies are employing a lot more people than I expected.
Parts of it is down to pure ignorance and not understanding the complexity inherent in the domain, but a part of it also bloat.
Is it a status thing to employe a lot of people? A hope of sustaining financial growth by increasing headcount?
Does anyone have any other examples of what Patreon does for them?
How does Patreon need this many employees? It really doesn't seem like that much of an operation.
https://www.subscribestar.com/prohibited_content
I'm all for having some SFW platforms, but let's not pretend that there isn't a dramatic, dramatic demand for NSFW content, and that banning it is nothing short of prudish.
Bit confused by reducing staff spend while increasing spending on engineering & product. Surely for a software company those are roughly the same thing?
Do they get a payrise to match US salaries?
Equity markets are often irrational and wrong. IE Covid- essentially every stock was down significantly in March of 2020, not realizing that some businesses will actually benefit from the pandemic.
That said, your statement about fat at these companies is true, and its probably been long past time that they clean out some dead wood.
Not when significant part of your employee compensation is equity-based.
From a corporate perspective, you are buying a fixed dollar amount of shares to compensate your employees- I haven't heard of a fixed number of shares being offered as compensation in years for pubic companies. This does not affect your cashflow, just the number of shares being purchased in the open market.
From an employee perspective, its definitely not fun to see the value of your grants drop by 50%. It should only really affect your decision to leave or not if you feel the drop is permanent, or just a temporary blip. IE if I was hired at Peloton in 2020, the stock has dropped 95% and while it will likely bounce back a decent amount, the equity part of your compensation is essentially worthless and not going to be a golden handcuff that will keep you around. Google/Alphabet, its down about 30% but thats likely just an overreaction and is to some extent welcome as you get more shares in your grant... it wouldn't stress me out at all- maybe if I was looking to cash out and buy a house right now, but this was a risk that was always there.
Really hoping they don't start pulling offers. I can't put my finger on why, but somehow that seems like it'd be even more cruel than layoffs.
I find it surprising that they are considering layoffs. There have been a number of articles about Sundar's concerns over productivity [1,2,3], but layoffs have a tendency to reduce moral and productivity.
[1] https://news.ycombinator.com/item?id=32515458 [2] https://news.ycombinator.com/item?id=32322131 [3] https://news.ycombinator.com/item?id=32816105
Sounds like someone is in serious need of an ego check.
I should imagine the people that blog post is relevant to know who he is, yes.
have we, though?
I am way early on this, I get it.
So professional! /s
https://blog.patreon.com/a-note-from-jack
I assume OP expected the blog post to be taken down or changed, so they captured it and linked to the capture instead of the original. I feel like the protocol for this should be to make a capture, post a link to it as a comment in the thread, and link to the original in the post.
If the stats from things like Patreon are to believed (and filtering out the "dead weight" of creators who don't post or have given up without closing their account) there's a serious "top 1% of creators make XX% of the revenue" problem.
Which means that for a small fraction, it's a job, for the vast majority it's a money-losing hobby.
And even if you don't, certainly an "industry" where 99% of the people "employed" don't even make the poverty line or make back their expenses (patreon and only fans would fall here) wouldn't. (The people trying to 'make it big' are probably moonlighting as retail/restuarant anyway, just as all those who tried to make it in Hollywood did in years past).
There's certainly major abuses but the 1099 and "self employed" world is even more full of them than the W4 world.
/s
But that doesn't make it a job. You could do hard work in moving a mountain but that's not a job.
Needless to say, earning money off of your looks (something you didn't work hard to gain in the first place) doesn't qualify as hard-working job.
Job (n):
1. a paid position of regular employment.
2. a task or piece of work, especially one that is paid.
---
It seems to fit #2 perfectly (exhibiting to an audience), and #1 can be met based on e.g corporate structure (subscription pay into an LLC that normalizes the salary etc)
I'd argue that it's in fact potentially "skilled labor" in that it's not obvious what it takes to produce content that brings regular subscribers. Tons of adult content creators burn out and pivot because they can't get traction.
Even if you're very conventionally attractive, you need to put in a lot of networking and marketing before you can make money off of "your looks". Even then, you don't just sit back and let your looks do everything.
Porn stars generally spend a couple hours DAILY in the gym. Then there's all of the events you have to do to remain relevant in social circles. Then there's actual shooting. But before that there's hair and makeup. Then there's outfits. Selecting garments that match your personal style and also are sexy enough to excite your fans isn't easy and it usually isn't cheap.
Going through all of that to get paid by the fans is absolutely a job. If the fans didn't pay, it wouldn't be a job.
Ignoring the time spent setting up shoots, editing, engagement, etc, and focusing just on "looks", you have to spend a lot of time on working out, make up, shaving, putting together outfits, etc.
If you think that looking good is something that doesn't take any hard work, it's because you've never tried to put in that work yourself.
An African American woman, for example, has almost zero chance of making it to the top 10 p$rnstars list, no matter how much she put effort and time to prepare herself.
Some things are just the realities of the world. Thinking otherwise makes you delusional.
If people are willingly paying you to do something, that's a good job as any other job.
Plus, I earn money off of my natural intelligence. I didn't do anything to gain it in the first place, I just happened to have intelligent parents.
> doesn't qualify as hard-working job
Two questions:
1. Why doesn't it qualify as a job if they are earning income?
2. Why should someone have to "work hard" to earn a living? If have a high-value easy-to-sell product, then why work harder than you need to?
If you have a cognitive aptitude for mathematics, you didn't "earn" that either - everything in some way or another is part of your birthright and privilege, both nature and nurture.
If you genuinely believe that the mind is somehow magically distinct from the same genetic system that gave you your physique, I'm afraid you're the delusional one.