I've heard the name 42Floors many times over the years as they seem to get a lot of press for being a hot startup. For the first time, I just visited their website as I'm in the market for some office space.
This product is pretty underwhelming. I was expecting something game changing--on par with Redfin or Zillow. There's no maps, no ability to filter by zip code or name of areas within the city of Los Angeles. Craigslist is actually more advanced in several key ways. They've been working on this since 2011? Where has that $17 million gone?
I'm reposting a comment from `suckystartup` below that got tor-killed because I think it illustrates your point well. From the 42Floors blog posts that pop up so often on HN, they sometimes give the impression that they care more about "startup culture" than about their industry or product.
> Another quick story before I really dive into this blog post. We had a gentleman over to interview for one of our account executive positions at 42Floors. He had strong experience leasing SF office space: great resume, great cover letter, did well in our initial phone screen.
> When he walked in the door, we could hear the clacking of his shoes on our hardwood floor. He was dressed impeccably in a suit that probably cost more than my first car and was carrying one of those leathery-thingys that seemed to exist only for the purpose of being carried during interviews.
> I stole a glance to a few of the people from my team who had looked up when he walked in. I could sense the disappointment.
> We’re all happily wearing blue jeans and sneakers. It’s not that we’re so petty or strict about the dress code that we are going to disqualify him for not following an unwritten rule, but we know empirically that people who come in dressed in suits rarely work out well for our team.
> He was failing the go-out-for-a-beer test and he didn’t even know it.
I don't know where the $17 mil has gone but anyone working at a startup that displays this kind of head-up-your-arse arrogance should expect layoffs. Maybe if this company hired for skill and not for beer buddies it would have been able to close deals.
I suspect the guy in the sharp suit realised he dodged a bullet as soon as he read the blog post giving him a public dressing down.
I've heard a lot of stuff about the startup scene in SV, but honest question: would anyone ever consider showing up for a job interview in anything more informal than shirt-trousers-shoes? And if the interviewee in that showed up to that interview in jeans/tshirt would the blog post have been different, or was the interviewer just looking to pad it out with an interview\culture-clash horror story and would we instead have been reading:
> Another quick story before I really dive into this blog post. We had a gentleman over to interview for one of our account executive positions at 42Floors. He had strong experience leasing SF office space: great resume, great cover letter, did well in our initial phone screen.
> When he walked in the door, we could hear the squeaking of his sneakers on our hardwood floor. He was dressed shabbily in a tshirt and jeans that he probably picked up off his floor five minutes before heading for the interview...
You absolutely can get away with jeans and a tshirt at an interview in SV; it's what I usually wear, and (anecdotally) what seems to be the norm. "SV culture" weirdness aside, dressed-down interviews for non-client-facing work makes perfect sense to me.
That being said, if someone either isn't aware of the custom or prefers to interview in a suit, it's idiotic to count that against them.
In my only ever job interview in the US, I was told beforehand to dress casually for my visit to their office. I'd expect that kind of preparation to be routine for professional HR people.
The attitude displayed by startups seems indicative of their arrogance and overconfidence after being given money for their "great" ideas...
A company that explicitly services the commercial world looking down on people for dressing in suits? They must hold a lot of contempt for their clients.
A technology-enabled brokerage is very different from a technology company with brokers. First, there is a cultural difference in who the heroes of the company are. Also, the latter is much more capital intensive.
I suspect they probably would have needed another 20-30MM to really get moving on the latter. A lot of that money going to consolidation of existing brokerages and monopolizing listing content.
Being a neutral aggregator is mutually exclusive from being a dominant brokerage.
I met this team a while back. All good people, very smart, but unfortunately seemed more focused on being a silicon valley startup than building a business in commercial real estate. As indicated by the topics discussed on the site's blog...
I've been in startups for about 15 years. One of the hardest things I've had to do was lay off 4 people we had just hired a month earlier.
One of our partners had agreed to terms on a project that required us to staff up. When the project fell apart on their end the whole thing was cancelled. We just didn't have the budget at the time to keep those people on.
It absolutely sucked. We tried to be generous with severance.. but these were people who had just turned down other jobs to take this one. We just kind of dumped them back into the market. It absolutely sucked.
I vowed then and there to never hire people unless I was absolutely positive the money was in our bank account.
This is one of the advantages of hiring contractors. They are used to the pump and dump, and if you really like them you can negotiate a longer term or permenant contract.
In the slightly stodgy public sector organisations I work in, using sessionally paid teaching staff to cover increased workloads is normal. If the workload increase becomes permanent, you can then advertise an established post. Seems prudent.
Perhaps as someone round here suggested some time ago, you should treat these companies as film projects. A group of freelancers get hired in to complete a project then when their work finishes they go on to the next project?
It sucks, but it's also a great market to be a real estate broker and shouldn't be hard to find new work. Also, if you're ever hired on for an experiment it would be wise to assume you won't make a career out of it.
Yes, this is what I meant. We want companies to take a chance on people who might not have perfect resumes, or for new ventures that might not work out. This gives people without traditional bona fides a chance to prove themselves, and to get experience.
I was only in the job market very briefly before giving up on the whole mess and starting a business. I didn't finish college, so it was brutal. The jobs I did get were non-traditional companies who took a chance on me. Sales jobs in particular will give anyone a chance to prove themselves. I came to deeply appreciate that.
For developers, sure. For other professionals, the market is not white hot. From the article, it looks like it was mostly commercial brokers and brokerage supporting staff who were laid off. I don't know the job market in NYC, so I can't comment on how hard it will be for them to find another job (after they were hired in late 2014 for this one).
As far as "the 37Signals way", that path isn't right (or even available) to every company.
If the thought leadership revolves around the journey, learning, and transparency then I respect a company CEO who shares thoughts independently of the short-term ups and downs of the company.
Indeed. And he was very selective and disciplined about what he chose not to do.
Many gurus are bad businesspeople. (What makes them a good guru contradicts the nuts and bolts of running a company) I'm glad to see how well he's done.
I sort of thought that when I first read the headline but then when you actually see what's going on, I think the moves makes sense and is more a demonstration of a reasonable attack that ultimately didn't make sense vs calamitous failure.
17.4 million in investment can't maintain a staff of 28? What are their big expenses? Or is it more of a strategic redirection? I like a lot of what Jason Freedman writes, though I don't have much experience with them as a company. Based on their public profile, I suspect this will get a lot of PR.
The search on the homepage is confusing to the point of seeming broken. I clicked 'Areas' and selected a few different neighborhoods in SF. Nothing happened. Clicked away. Nothing happened. Clicked the out-of-the-way, 'search' button (which was confusing because it was too wide to be a button and looked almost more like its true calling life was to be an input field). I don't think anything happened? Closed page.
It did do something when I clicked the Search button, but the design is indeed a total mess.
The generic header image that makes it look like a domain squatter's landing page certainly doesn't help. And a phone number in a prominent position at the top of the page, very Internet savvy.
It's disappointing to see the layoffs, but I think its smart of them to stick with the core focus of providing excellent listings for office space. There are a lot of costs ($$s and energy) associated with doing business as a brokerage company and for a small startup it makes sense to focus on one thing first. Perhaps they will be able to add the brokerage arm once they've proven out the search side.
I suspect this is less about focus and more about conflict with other brokerage houses. Most commercial real estate is owned by an owner-broker who syndicates a deal and primarily makes a good portion of his money off closing the sale, property management and leasing...
In other words, the people they depend on for the listings probably had no interest in sharing leasing fees with them...but are thrilled to be able to list and even pay a premium listing fee.
Focus is the right buzzword for them to spin this...but my bet is that they shot themselves in the foot when they decided to compete with their users.
I’m late to these comments which is too bad because reading this makes a few questions come up in my mind and would love to hear others’ thoughts:
1. As a founder, how does one balance one’s evangelical passion about the product/mission with the responsibility one has to explain the risks of a job to new employees? Should one just be super passionate and expect the employee to have a “caveat emptor” approach, or is there a minimum threshold of kimono-opening one should do in order to advise potential hires of the riskiness of both the market generally and one’s startup specifically?
2. In the case of the people who were fired from 42Floors, being a good broker is a very fungible skill and is relatively agnostic of firm affiliation; either you’re good at selling real estate or you’re not (compared to, say, being a good designer, where a given individual might be excellent in one role and terrible in another, depending on team and mission). Anyway, question is: when hiring employees with fungible, broker-like skillsets, is it appropriate to be more — I don’t know what the term is, risk-tolerant, freewheeling, forward-leaning, etc — in deciding whether it’s appropriate to hire a new person? The logic here being that if things go bad (as they did at 42Floors), those people will be able to land on their feet relatively easily, compared to others who are going to need more time/effort to find a new job.
3. If you have raised a lot of money and have cash in the bank, and lay off an entire division of people, what is your obligation to give them severance / extended health care / etc? My inclination would be to be very generous in this regard (i.e., firing good people who had to be fired because I realized I made a mistake hiring a bunch of people with their skills, not them specifically), mainly on a moral basis rather than a reputation-saving one. However, does doing so make one look weak in the eyes of the Valley VC community? Say you gave everyone something generous, like 3-6 months of severance….would it be hard to raise money later because investors think you don’t have a hard enough heart to run a profitable business?
I know this is a relatively stale thread and not a lot of people watching, but very interested to hear thoughts on this.
I can't tell if you are serious or making a joke. All that guy does is talk about startup culture and not about actively growing his business (and being successful at it).
just in case i'm misunderstood - i'm simply suggesting that he must have struggled intensely with this. it hurts him and he could drag the pain on and not face the music that he made a mistake. instead, he faced his mistakes head on and set a clear direction for his company.
it really sucks short term for the employees. but it sets them free and it's in their long term best interest too if they'll end up learning more and being more successful elsewhere.
so i give kudos that he didn't take the easy route of letting the mistake continue, looking in the mirror and waking up to a very difficult day.
This product is pretty underwhelming. I was expecting something game changing--on par with Redfin or Zillow. There's no maps, no ability to filter by zip code or name of areas within the city of Los Angeles. Craigslist is actually more advanced in several key ways. They've been working on this since 2011? Where has that $17 million gone?