Vista Equity writes off PluralSight value, after $3.5B buyout | Hacker News Reader

Vista Equity writes off PluralSight value, after $3.5B buyout

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I don't know if it's my own career development, but it felt like the quality of Pluralsight has also taken a nosedive.

I had a bit of career break during the pandemic, so went from being a fairly regular consumer of pluralsight in 2018/9 to only coming back to it fairly recently.

Whereas previously it felt like I could find interesting guides at my level, when I tried to look for similar things now, nothing felt quite right.

Worst still, some of my previous favourite series were no longer available. It seemed really short sighted to destroy so much value.

Even if videos were produced on "old" (i.e. .Net framework) technology, they should be marked as such, not removed from the platform.

They could have been a massive hub of long tail content, instead it feels like they're trapped re-recording and refreshing the same content.

Perhaps it's also just market forces, I think 5 years ago there was a lot more .Net content and perhaps .Net is just a lot less in vogue now.

One of the recent videos on .net benchmarking had serious flaws. I realised half-way through I had seen an article on hacker news about it, but hadn't realised it was the same course. ( https://sergeyteplyakov.github.io/Blog/benchmarking/2023/11/... with hn discussion https://news.ycombinator.com/item?id=38137879 )

It was not great to work at a company Vista acquired company ~10 years ago. Engineering talent fled, code quality dropped, product prices were jacked up, etc. I guess the company I worked for was then sold to another pe company in 2017, but it's not public if Vista made money or not. I would guess they're still using cold fusion to this day.

Essentially no company bought out by private equity manages to remain high-quality. The entire point is to milk the revenue stream dry while overleveraging on debt to provide investors with a large short-term payout. They do this by slashing costs to the bone, laying off too many people, and betting that the remaining husk will coast long enough to make the target return before they sell off what’s left to second-stage vultures.

So, while it’s sad, the only surprising outcome would have been if quality stayed the same.

Depends on the PE tbh. We recently got acquired (after being split from our previous owner) and if anything we now have much better leadership, and they seem to focus on R&D more than anything else. It does help that they have clearly stated that they aim for making the corporation public in 5-7 years, which makes it less likely that they'd engage in bleeding the current assets dry for short term gains.

It might be different for startups though for sure, in our case we were spun off from a very old corporation :)

They're not the exception of the rule, the rule is just going to kick off later for you (pre-IPO, when cost cutting measures will take place and the process described above will start)

I don't disagree, but I was more talking about the instances of PE acquisitions that get squeezed out. Obviously though you are right, at the end of the day they will want to make the business look as attractive as possible when they offload it. But to me that's still better than getting bought out to get squeezed and left to rot

> Essentially no company bought out by private equity manages to remain high-quality.

PE is a big category. Most PE-purchased companies are entirely boring and aren't imploding like these companies you hear about in the news.

I know it seems like every PE backed company just explodes immediately because that's all we hear about in the news, but the selection bias of news stories means you're only hearing about the interesting stories where there's something to report on. Nobody is reporting on PE-purchased companies that are quietly continuing to operate.

Serious question: you have some examples of a company post-PE where you might say "this place still has quality?"

I guess that's a hard pitch in general, given people always complain. But there are some companies in the world whose image has improved over time, so maybe there are some PE companies that have righted the ship and where the brand does not feel like a shell of itself?

The most obvious example I can think of is Steinway. It was not a traditional PE shop buying it(at the time very famous hedge fund bought it for to reorg), but it is still a privately owned company and I've not heard anything bad about the pianos.

Yahoo is an example of this. They were bought out by PE Apollo in 2021 and they consolidated their businesses, such as selling the Japanese arm of their business. I still occasionally use Yahoo finance and it does not seem to have degraded to much and will is what I deem as having quality.

Most PE deals aren't in the $3.5b range nor are they in the mostly overvalued "software platform" category. Those are ripe for razing to the ground staff-wise.

Regardless, PE in general works on the basis of slashing costs first. When has that led to a better quality product?

A product isn't going to improve under private equity ownership

Agreed -- we had a team account at work for a while, but then they both took away a huge portion of the back catalog (something like 60% of my queue disappeared) and then immediately after wanted to increase our pricing enormously... we passed.

I've been a Pluralsight subscriber for probably over a decade now. Their content is awesome for getting up to speed quickly or just learning about a technology without too much fluff.

I do see though how AI is a huge threat to them. Using Claude 3 for coding and being able to ask questions about my specific issues and getting tailored responses every time to my exact issue (vs watching a general video and applying that knowledge through trial and error) has made me much more productive and also greatly reduced my reliance on using sites like Pluralsight to get up to speed/debug/etc.

I agree that their products are amazing but having dealt with their sales staff last year and this year, I completely understand why they're underperforming. They're rude, sarcastic, always have a very take-it-or-leave-it attitude, and had a bad attitude when I asked about certain features, like I was wasting their time. I canceled talks for 6 months just to let the memory fade.

I got so pissed when they threatened legal action as a way to "entice" me to upgrade my individual subscription into a team license that I quit it 6 months early. Now at a new company I jumped at the chance to cancel a 90-seat annual contract and we have not had any complaints from the department.

Who do you use in replacement?

> I do see though how AI is a huge threat to them. Using Claude 3 for coding and being able to ask questions about my specific issues and getting tailored responses every time to my exact issue (vs watching a general video and applying that knowledge through trial and error) has made me much more productive and also greatly reduced my reliance on using sites like Pluralsight to get up to speed/debug/etc.

That seems like a learning cul-de-sac, sort of like trying to learn a city only by following turn-by-turn directions and never looking at a map. You're going to have no idea all kinds of things are even there.

Also, this: https://www.nytimes.com/2024/04/02/opinion/ezra-klein-podcas...

> And reading the Sparknotes often would be enough to fake your way through the test, but it would not have any chance, like, not a chance, of changing you, of shifting you, of giving you the ideas and insights that reading “Crime and Punishment” or “East of Eden” would do.

> And one thing I see a lot of people doing is using A.I. for summary. And one of the ways it’s clearly going to get used in organizations is for summary — summarize my email, and so on.

> ...But what matters about reading a book, and I see this all the time preparing for this show, is the time you spend in the book, where over time, like, new insights and associations for you begin to shake loose. And so I worry it’s coming into an efficiency-obsessed educational and intellectual culture, where people have been imagining forever, what if we could do all this without having to spend any of the time on it? But actually, there’s something important in the time.

> There’s something important in the time with a blank page, with the hard book. And I don’t think we lionize intellectual struggle.

Learning/Coding with Claude 3/GPT4 is not like following turn-by-turn directions. It's like having a city guide next to you that knows everything about every street and the history of every building.

How often does it tell you things you're glad to know but wouldn't have thought or known to ask about?

Very often, when I ask 'how do I do x' and had no idea how to do it in the first place.

I know what your trying to say, but if you ask how to do your problem, instead of something like how do I use a for loop to do it, you'll be given a solution.

Yeah, I've definitely seen it come up with API methods and the like, that I'd never have known to look for in docs. That's not quite what I have in mind here, though, but more how well LLMs tend to replicate the ancillary context that is available when reviewing documentation. My experience has been that they tend more narrowly task-focused than I do, although it occurs to me I don't think I've tried prompts around "suggest some solutions for the following..."

In general, I still find it frequently surprising just how much subtle differences in formulating a question can yield significant differences in response.

You can modify the system prompt to describe who you are and your ability level, and to instruct the LLM to fill in gaps of knowledge you wouldn't know to ask about.

I’ve found them to be quite good but I often give an example of what this would look like in another language or I ask follow up questions on are there other ways and what are the tradeoffs etc. it’s all what you make it. Not that different from talking to another engineer.

The best part by far is I can ask to dive deeper or explain something that I didn’t understand very easily. If I was reading a book or in school I can’t stop the world and have it refocus on what I need to understand to continue easily. I haven’t really had that many hallucinations in coding questions - sometimes it’s almost typos where the library and method do exist but typed slightly differently

More like a city guide hallucinating streets and the history of every building and hoping no one questions it.

> That seems like a learning cul-de-sac, sort of like trying to learn a city only by following turn-by-turn directions and never looking at a map. You're going to have no idea all kinds of things are even there.

But you do walk the streets. Sometimes learning this way lets you deliver on stuff way faster, even if you don't understand the whole.

You’ll never get any real insights reading Crime and Punishment or East of Eden anyway. You have to live it.

How regularly do you work in a new domain where studying on pluralsight has been helpful? Genuinely curious; I’ve used it when I started my current job, but haven’t thought to reach for it since.

Eh I'd say 3-4 times per year where it's really useful, but a lot of the time i like doing some of their courses just to brush up on stuff I already know, and usually I walk away with 2-3 new things that I didn't know about the tech stack i'm working in.

Normally PE funds are know for not writing things down due to a few reasons:

- they are private so whose to say what its worth

- rolling funds where as one fund closes the new fund that is raising can take in those positions so no need to mark down or try and sell those positions at firesale prices.

This is a bit different as this is a "dropdown". Here the company is moving some IP into a new company and using that to get new financing, hence Pluralsight being written down to zero. Existing lenders get less security so this is often used to bring in new lenders money to pay off old lenders and get in new ones at better rates.

Vista probably made money here by having their old debt bought out so they may not be to unhappy about this and this isn't a position going to zero as is being reported.

Tax-loss harvesting.

Ah, my investment “strategy” after the 2020 mania and ensuing losses.

> One source says that the Utah-based company's financials have improved, with a around 26% EBITDA growth in 2023, but not enough to service nearly $1.3 billion of debt that was issued when interest rates were lower.

Pluralsight hasn’t failed entirely as a company. It’s just that it can’t produce enough profits to pay down the huge debt Vista took to acquire it.

Many tech PE deals happened under low interest rates, but higher interest rates mean debt has become more expensive to service.

Pluralsight would be very successful if it took minimal VC funding and didn’t go the PE way.

One reason for Pluralsight’s success is through acquiring a bunch of tech training and e-learning companies to have a huge content library. No doubt they used some of their quarter of a billion in VC cash to perform those acquisitions.

Who is to say they reach “unicorn” status and have a good exit if they didn’t take on that VC cash to do those acquisitions?

Besides the founders, who gives a shit if they have a good exit?

As a user, them destroying chunks of the e-learning space and cashing out is something I view as a negative.

I was just referring to the idea that they could just not take VC cash or the PE deal and that would have worked out better for them. The current structure and offering from the company are based on those things. It would look very different without those things.

For context, I've used PluralSight for 10+ years. Scott Allen (RIP) was my favorite. I'm still salty about PluralSight acquiring CodeSchool and effectively shutting it down (what was the point of that?).

This is arguably more fallout from elevated interest rates, and the risk thereof, being off the radar of people that work(ed) finance professionally. The company was performing and without the debt would be fine. Vista gambled and lost. It happens.

This is kind of sad. It was /is a functioning profitable public company with employees. A PE firm decides to take a huge loan to buy it, and now the company is gone. All those people lost their jobs. A huge net negative on the world and society because of greedy PE.

the company isn't gone. vista is likely getting wiped out and the lenders will own the business.

More than half the employees have been let go in round after round of layoffs for 6 quarters straight.

Leveraged buyouts just feel like something that should be plainly illegal. I know a bunch of wonks here will trip over themselves to try and justify it, but given how much of these kinds of transactions are basically "the directors just decide to empty the coffers"... at least tax it in a way that makes sense or something!

> Pluralsight would be very successful if it took minimal VC funding and didn’t go the PE way.

Pluralsight wouldn't have been as big as it was without that VC funding.

You can't just imagine the company being the same as it was but without any debt. The debt was used to make the company what it was.

The timing coinciding with the founder exiting is interesting.

I've heard multiple horror stories from founders who sold to Vista. They don't exactly have the best reputation.

I wouldn't be surprised if this move stripped value away from other stakeholders in some slightly questionable manner.

I know many who have had hugely successful exits to vista. They are extremely good at what they do - but perhaps what they do doesn’t align with your morals

If drop in quality and increases of price for the same product is good morals, I question the supporting worldview.

"Profits above all" is not a good thing. Authentic delivery and growth is a great thing -- it means people want your product. Profits above all is just pillaging.

Another article with seemingly more details https://finance.yahoo.com/news/vista-backed-tech-firm-moves-...

1B+ write-off's all deserve a full post-mortem. It's crazy to imagine such amount of value disappear into void.

I consider it the beauty of capitalism. People are equally free to create huge value or destroy huge value.

That also begs the question how much of that value is substantial and how much of that is just narrative froth from speculation.

All value is subjective. If I’m dying of thirst I will pay anything for a bottle of water.

Rarely is value created or destroyed. It's transferred, as it is here.

There are a few big exceptions to this. Discovering a new deposit of mineral wealth and the microcomputer revolution drastically speeding up business tasks are examples.

That's like exactly the opposite of how economy works. Taking a great firm and reducing it to zero destroys value. Building a great firm from zero creates it.

I personally believe that the failure to understand this is the reason why the political left is so bad at building economies when given a chance. Being obsessed with the fair distribution of value, they overlook the creation and preservation aspect. In the end there's nothing to distribute.

Barring rent seeking and other anti-competitive behavior, all net profit is value creation.

Even rent seeking is value creation, just less than alternatives.

No free exchange ever occurs unless the counterparties disagree on value, leading to a net gain post transaction.

The definition of rent seeking is manipulating the political environment to create new wealth for yourself without creating net wealth for society.

The classic example is the owner of a section of river imposing a toll for boats traversing the river. The rent creates value for the owner but exactly the same amount negative value for the rest of society.

A toll for a ferry the owner created would be creating wealth. As would developing a resort there.

Modern examples of rent seeking are usually related to regulatory capture or housing politics.

Why would any of us care? It's not our money. $1B+ valuation changes happen all the time.

Taxes? The investors in the PE's fund that owned this company?

What? Are you saying that you think there needs to be some kind of post-mortem because the investors might end up paying less income tax then they would have in some unlikely alternate reality where the deal was a success? That doesn't make any sense at all.

I'm not GP, but perhaps something like the following would be a reason (investigation might be a more accurate term than post-mortem in that case).

>In October 2020, Vista's CEO Robert F. Smith and investor Robert T. Brockman were named in a tax evasion case.[33][34] That month, Smith signed a non-prosecution agreement with the IRS, agreeing to pay $139 million and testify against Brockman.[33]

https://en.wikipedia.org/wiki/Vista_Equity_Partners#Tax_evas...

It's not really anybody else's business if someone else is maximizing taxable revenue or not.

Investors have an interest though, but presumably more visibility if they want it

Related to preventing value getting shoveled into the void, I was reading an article about tax write offs for movies that were never released - even though they were basically done. The fun suggestion someone had was that the movies be released to the public domain, since in some sense, society was footing the bill. It seems like something along those lines would be interesting here.

Pluralsight is a classic example of a small tutorial site forced to become a giant company. It just doesn't work. There was another: Treehouse, which had a similar fate. On the other hand Jeffrey Way's Laracasts is an astounding success and had a huge role to play in the second coming of PHP.

I mean, it does work—just not at 1B of leveraged debt. The actual company financials look decently healthy.

I've always been curious about what companies in the graveyard of VC-backed companies would do really well as bootstrapped or 1-person shops. Laracasts is a great example.

I bet a lot of “failed” companies could provide a nice steady income for a small team if they weren’t forced to grow fast.

“It's also a company whose future could be dimmed by advances in artificial intelligence, since some of the developer skills it teaches are becoming automated.”

Interesting take.

There's absolutely a tail risk of this stuff making the vast majority of "knowledge workers" jobless.

I took it more as Pluralsight courses are barely better than documentation, and from my experience of being a subscriber I definitely agree.

I don't think there is much vision or editorial control. Anyone with an idea can seemingly produce content for these platforms and it almost always falls short.

How do you position this video content versus documentation? Anecdotally, younger audiences may have a preference at times, but I think it's more about the use case and preparation. I've seen really good video content and bad. Same applies to docs, or any content.

I mean IME with Pluralsight, I fully meant what I said. Most videos barely go beyond the documentation.

I've paid for Lynda (now LinkedIn learning), Frontend Masters, Egghead, educative.io, Udacity, Laracasts, UI.dev, Safari, Ardan Labs, etc.

If you want to interview for a FAANG job, educative.io has the best content. Everything else on the site is extremely poor but hey if you need to refresh on system design or leetcode patterns no other content is as good.

I use to like Frontend Masters, but the decay rate of their courses is too high. You can take a workshop from 2 months ago but the instructor will never mention the version of the language they use and often the project files will fail to install. I absolutely do not think this is a good thing and should absolutely not be tolerated. You can blame NodeJS but it's a terrible indictment when 90% of your catalog is worthless. I've also disliked the new generation of instructors they have where it's mostly the same 3-4 people every year that always talk about the same topics. It's disappointing because this would be a service I use to recommend every frontend dev 3 years ago.

The only thing I continued to subscribe to is Safari/O'Reilly. Here you get books from all the major publishers and some decent courses as well (like Ultimate Go by Bill Kennedy); but I won't be renewing this. Books on extremely advance topics aren't released in massive amounts annually. There's like maybe one or two software books truly worth buying every year. Here's what I've bought the last 5 years (Beautiful Code, The Cathedral & the Bazaar, The Soul of a New Machine, Writing An Interpreter In Go, Game Engine Black Book, Refactoring UI).

Maybe I've progressed enough in my career that I see the best way to learn is to just read the docs ASAP then just build as many things as possible after. I truly mean build too, you can't watch someone make a project for you and copy them. You have to struggle when learning, because that's how you confirm your priors and what you actually know. There's also the benefit of just getting better at delivering software the more you make.

They've done studies about pottery classes where two groups of students were graded differently, one would be graded on the amount of pottery they make and the other would be graded on a single piece at the end of the system. The students that were graded on the amount of pottery tended to do better and make more advance things. This mimics my experience as a dev too.

Pluralsight seemed to be very .NET/Microsoft focused. As the developer winds shifted after from pure Microsoft stack, the value of their library seemed to have dropped quite a bit. Not surprising.

Sad. Pluralsight has been my favorite site in that category. But in truth I haven't visited in several years.

Sad to see. When I started my journey into programming, PluralSight was one of the main resources I used, together with Lynda.com and Team Treehouse.

All 3, sadly, have seen the quality nosedive in recent years.

Today I mostly rely on Udemy. I know it has a bad rep and tons of garbage, but there are a handful of instructor that deliver really high quality content there. For example, see Fred Baptiste Python courses.

Even with AI taking charge, I still believe there is a place for a high quality, guided course like PluralSight used to offer back in the day.

A chain of buyouts hurt the quality of each… linuxacademy was very good, but that deep content died when ACG bought them and rolled it in. ACG became more about engagement and cert hunting. PS owns all now and doesn’t need to compete.

It's very rare that a PE investment fails this big, this fast.

I was a Pluralsight subscriber for about a decade before giving up on them in the face of declining quality and higher prices.

My biggest disappointment was their pricing around Flow which I saw as their genuinely killer app - sort of like APM for your actual engineering team. But they priced it out of practicality for almost any organization.

Can you say more about flow?

I'm curious about practical use cases, could you share some examples?

PS acquired git prime and rebranded it as Flow, and then basically just kinda ignored it tbh. Basically it analyzed git data and gave info like velocity, how much work was new features vs refactors, etc. Very simplified explanation but for places where code-level analysis is used for performance tracking it can be useful. The problem imo is that while that kind of info is certainly interesting, in most cases it's not really that useful or actionable in practice.

I honestly found it easier to get a course through UDEMY. Passed my CCNA with the help of a $10 course.

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