In his latest email newsletter, Mahalo CEO Jason Calacanis discusses “How To Handle Layoffs.” It is a topic he knows too well, having had to go through a layoff of 10 percent of his staff earlier today. After repeating the text of his blog post announcing the layoffs, he offers some advice for other entrepreneurs on how to do it right. The email newsletter is reprinted below in its entirety.
Update: Why this is news. There is a lot of discussion, even outrage, in the comments and elsewhere about my decision to post this email, against the express wishes of its author and his subsequent request that it be taken down. We are not going to do that.
Like it or not, this document is news. Its author, Jason Calacanis, is the CEO of Mahalo, which announced a layoff yesterday. (He is also a TechCrunch partner apart from Mahalo in that we put on the TechCrunch50 conference togeher). At the time I posted this on Wednesday at 9:45 PM ET, the Mahalo layoffs were being discussed so vigorously that the topic was at the top of Techmeme. Although Calacanis had already written a blog post on the subject, he went into much more detail about why he felt he needed to go through the layoffs and how he went about doing so in the email. He also updated in the email how many people are still employed at Mahalo (30 full-time, 50 freelancers) in response to some reports.
The email went out to nearly 9,000 people. It was not a private email. And Jason Calacanis is not aprivate individual. He is the CEO of a high-profile startup and an Internet celebrity in his own right.
More importantly, the email shed light on an event that had happened earlier that day and that many media outlets were reporting on and speculating about. Here was a document from the CEO himself outlining his inner thinking on what had just happened. It was news.
I decided to publish the it in full, unadorned because it speaks for itself. Publishing it was no different than what we did when we recently put up Jerry Yang’s email to employees about the latest layoffs at Yahoo. Nobody complained when we published Jerry Yang’s email. Nobody thought it unusual for the Wall Street Journal to publish in full then-Yahoo SVP Brad Garlinghouse’s internal “Peanut Butter Manifesto” outlining the problms at Yahoo a couple years ago. News organizations big and small publish documents that come across their desks all the time. It is part of our job of informing our readers about events in the world.
There is no copyright issue here and there is no issue of me personally breaching an agreement. Nothing is off the record unless a reporter agrees that it is off the record prior to receiving information. I made no such agreement and Calacanis cannot unilaterally impose such restrictions simply by writing “Do Not Reprint” at the top of his email. Although I respect his desire in general to control who sees his email newsletters, in this case the news value of the document outweighs his personal wishes.
Beyond the layoffs at Mahalo, which are tiny in the grand scheme of things (six people), the email speaks to something that is happening across the startup economy. Every startup CEO is at least thinking about the need to cut back right now, if not going through the same ordeal that Calacanis had to go through. Others can learn from his experience. He actually has some good advice. Read the email. The fact that he was able to minimize the number of layoffs to only six people and how he did that is far more interesting than whether or not TechCrunch should have published the email in the first place.
Location: Mahalo HQ, Santa Monica, CA
Wednesday, October 22nd, 6:10PM PST.
Word Count: 3,381
Jason’s List Subscriber Count: 8,889
List management: http://tinyurl.com/jasonslist
Message type: Startups
Forwarding instructions: startups, VCs
Republishing: PLEASE DO NOT REPRINT
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Given the challenging economic environment, we’ve decided to make some pre-preemptive cuts at Mahalo.
Although we’ve got a significant amount of cash on hand and the business is ahead of schedule in terms of traffic (4m uniques a month, double where we thought we would be at this point), we’re fairly certain that the advertising climate for the next two years will be severely depressed. To ignore this obvious fact would be irresponsible.
We’ve laid off a just under 10% of our full-time staff, cut our overhead by doing smart things like renting desks (we have six desks/offices available fyi), and reorganized our editorial department to focus on freelance positions over in-house editors. The net result of the effort is we are giving Mahalo another year of “dry powder” (or runway) to complete our mission.
We can now operate past 2012 even if we never make any advertising revenue, and truth be told, building advertising-based companies is my specialty (the last two, Silicon Alley Reporter and Weblogs, Inc. each broke 10m a year revenue between their third and fourth years). Perhaps we’re being too conservative, but I’ve rarely heard of companies that went out of business because they made cuts too early, and I’ve heard of many who have reported the opposite.
As the CEO of the company, the responsibility for these cuts is mine and mine alone. Obviously, I did anticipate that the market would correct and that is why we raised $20 million over two rounds of funding before we launched. That move ensures that Mahalo will be able to get to profitability and ride through what is sure to be a very deep and painful recession.
While I anticipated and prepared for the ‘internet winter’ we’re now facing (you’ve read my posts and e-mails about the startup depression, I’m sure), I failed to realize how bad the situation would get. It’s much worse than I thought it would be, and ignoring market conditions today would only mean deeper cuts down the road.
It’s my responsibility to make this hard decision, and I don’t take it lightly. To the people impacted, I’m very sorry that I wasn’t able to anticipate this better. It’s my fault and I’m sorry that you’ve got to bear the burden of my inability to better prepare.
Update: We still have 30 full-time folks in our office and 50+ full-time freelancers–so the reports of us cutting 1/3rd of our staff and having only 10 people are incorrect (gossip bloggers incorrect…what?!?!).
How we handled it
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Since many firms are rightsizing–or considering rightsizing–their operations now, I thought I’d try to explain how we handled the issue at Mahalo as openly as possible. Additionally, I thought I would go into how I handled it at my first company, Silicon Alley Reporter, where we cut our staff from 70 to 15 people over the course a long, painful year. My hope is that by getting into some of these details, I can share what I’ve learned about this painful process, and that you might be able to give me feedback on how we did and what we could do better.
The timing of the economic downturn and the need for these layoffs could not have come at a worse time for me. As many of you know, I’ve been out of the country for over two weeks visiting Athens, London and Seoul. We did 90% of reorganization while I was, quite literally, traveling around the world.
Speed
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The most important thing to realize in a situation like we’re facing is that, chances are, you cannot act too quickly, but you can easily act too slowly. For this reason, I decided that we had to come up with, and execute on, a cost-savings plan within two weeks. There is little upside in pushing out hard decisions like this slowly because of the simple fact that you’re burning gas while you’re deciding.
If you’re going to make cuts, set a time table based on analysis, strategy, debate and execution. For this process, I gave us about five days to analyze our situation and five days to develop a plan–there was some overlap obviously. We spent two days debating the right strategy and we executed the majority of the plan yesterday.
Again, there are four steps: analysis, strategy, debate and execution.
Emotion
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The six worst days of my professional career, on an emotional basis, were the four days I laid people off at Silicon Alley Reporter, the day I switched the name of Silicon Alley Reporter to VentureReporter, and yesterday when we did our layoffs/reorganization at Mahalo. There is nothing worse than looking into the eyes of the team that you’ve cultivated, challenged, pushed, and won and lost with, and having to tell them that they have been cut from the team. I’m sure this is how the coach of a sports team feels like at the end of training camp when many times they have to let go of great people who’ve done amazing work, but due to circumstances, they can’t keep them on the team.
It’s emotional, it’s personal, and it sucks. I’m not one to get depressed, but I would be lying if I told you that I haven’t been depressed about having to do these layoffs. While emotion is great when you’re in the heat of competition, it really doesn’t help that much when you’re doing strategy work. As such, you need to get the members of your management team to agree that you’re going to pursue your very difficult job with as little emotion as possible. If it helps, pretend you’re an outside consultant and you’ve been given the task to “save the company” with these cuts–because that’s not far off from the truth.
In other words, try and detach yourself from the emotion of the situation so you can make the right decisions. You’re going to have to tap into that emotional stuff later anyway–conserve it during your analysis and strategy.
Analysis: Assessing where you’re at and setting a goal
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The first step was getting out our P&L and looking at each line item in detail. For our business, we have a large editorial group, a modest technology team, almost no marketing costs except for our Mahalo Daily video show, and extremely tight overhead. We haven’t built our sales group yet, so that line item doesn’t exist. We do have some modest Google Adsense revenue which we have been testing for the past couple of months.
We had exactly three years of capital in the bank when we started this process, and while that is 2-10x the runway of most startups, I set the goal for the company to reach four years of runway. Absurd? Too conservative? Perhaps, but I’d rather be conservative until I know what exactly is going on in the market.
In order to get there, we needed to do some combination of cutting costs and increasing our revenue.
The goal was now set: four years of runway.
Analysis Part Two: Line by lining your P&L
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It was fairly clear in looking at our budget that we were spending two editorial dollars for every technology dollar. Our focus on editorial is what got us to four million unique visitors a month, and a nice loyal base of users at Mahalo.com, but the truth is we’ve been underspending on technology. This made it very clear to us that we had to cut the editorial spending as much as possible while maintaining the editorial integrity of our product.
The truth is that the massive editorial we’re building wasn’t getting us the bang for the buck that our technology was at *this* moment. At different points, investment in technology, editorial, or marketing can grow your business and it’s important to not get locked into a specific amount of spending on any one of those items. However, when you have venture capital–and a large amount of it–you can avoid the issue. This is the unhealthy truth about having outside investment: it distances you from the truth.
As a venture-backed entrepreneur, you have to be able see through the fog of millions of dollars of investment in order to find your way sometimes.
Question every dollar you’re spending and ask yourself: “Is there a better use for this dollar?”
When we “peeled back the onion” of our editorial spending, it became very clear that our most efficient work force was not the group of editors we had in our office, nor the remote workers we have in Manila (doing data entry type work), but rather the $10-12 an hour “remote guides” we have working from home. These editors cost us, all in, less than half of the folks in our office due to things like overhead, benefits, lunch, and equipment. The workers in Manila are half the cost of our “remote guides,” but they are 1/2 to 1/4 as effective (depending on the task).
This should have been more obvious to me since we pioneered the work-from-home model at Weblogs, Inc., where we had 300 bloggers working from home with only three or four people managing them–a 75 to one ratio (Judith Meskill actually managed 150 at one point herself God love her!).
Of course, when you’ve got a lot of venture capital and you want to grow fast, sometimes you give up on the most efficient model for a model that goes faster. That makes logical sense: overspend to take marketshare. Having people in the office was more costly, but it did get us to over four million users a month and 100,000 pages built. When folks pull up a list of “future search companies,” we’re always number one on the list because of this investment in content. So, it was well worth it.
In phase two of the company–and given the economy–we had to rethink our strategy.
Next we looked at our Mahalo Daily video show and realized that we were actually covering about 25% of the costs. Not too shabby, but not enough to justify a project that is not core. Since it is getting over two million views a month–25 million a year–it would be a shame to stop doing it. We asked ourselves how do we get this closer to break-even? It became fairly clear that cutting some costs here and getting closer to break-even–say to 50-70%–would be a good idea. As such, we moved the video editors from full-time to contract basis. Problem solved.
Strategy Part One: The obvious stuff (i.e. office space)
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The most obvious things we found on our P&L were operational things regarding our facility: office space, phones, servers, etc. We swapped our communication systems out and saved $1.5k a month, we rented out a bunch of space, we cleared out some other offices to rent them, and we cut down on non-essential travel (think: my never-ending speaking gigs). The saving here was solid so we moved on to the hard stuff referred to coldly as “human capital” by accountants. People.
Strategy Part Two: The hard stuff (i.e. people)
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The editorial analysis above gave us a clear area where we could save a lot of money: by moving aggressively to a freelance, work-from-home workforce. This also gave us a fairly good idea of how to handle our layoffs and cuts: try to do a reorganization where we shifted our full-time editors at our office to work at home freelancers. Instead of simply laying off a bunch of our editors we could offer them the ability to work from home as consultants.
The good news? Most of the editors took this offer to become freelancers, and in fact many of them seemed to have preferred it. Some were justifiably not happy with it.
In life, sometimes you have to learn things two or three times. One thing I’ve learned two or three times now is that writers, in large part, like to work from home in their pajamas with a big cup of coffee and their loved ones by their side. I know this to be true because most of my e-mails to you guys come when I’m sitting in the garden with my laptop, a cup of joe, and Taurus and Fondue curled up at my feet.
Must. Learn. To. Learn. From. My. Learnings.
Strategy Part Three: Revenues
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We immediately started running more aggressive Google Adsense, and we doubled our revenue. Great for the bottom line, not great for user experience. We’ll keep thinking that one through obviously. Additionally, I’m personally working on five content-partnership type deals that will drive revenue. If we land one of them, we’ll cut 10% of our burn–I’m sure I can close at least one or two of them by the end of the year.
Bottom line: We’re getting focused on revenues a little earlier than we thought we would, and that’s never a bad thing in my mind. However, our goal is to build a service that has 7-10m unique visitors a month. We don’t want to get to break-even and stay for 4m for ever. That’s a nice business, but we want to build an EPIC business.
Debate
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This past weekend, the day after I got back from my trip, I had my management team over to discuss what strategy we would execute. It didn’t help that I was massively jet-lagged, but we got through it. We discussed cuts and what the company would look like after the reorganization. We decided to do the cuts at the end of the week, but after making that agreement, I decided we would do them on Tuesday in order to avoid it leaking and in order to get the company focused on the product roadmap again.
The fact is, too much debate is probably not going to help. As the leader of the organization, you can take all the information in and make a quick decision. If you cut too deep, you can hire folks back, and given the economy, it’s better you secure your company’s survival right now and think about scaling up when the market gives you some signs of hitting a bottom. There is no sign of a bottom right now–despite what the clowns on CNBC might say.
The bottom is when Google and Apple miss a quarter and/or lay people off.
The bottom is when unemployment numbers go down and consumer confidence comes up (not the other way around).
The bottom is when the massive wave of variable, ARM mortgages come up in 2009.
Execution
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Having done layoffs four other times there are specific mistakes I’ve made and lessons I’ve learned. They are:
1. Don’t spread layoffs over multiple rounds: This is a horrible idea because it creates massive fear and uncertainty inside of your organization. If you’re going to do layoffs, do them once, do them quickly, and explain to people that you’re doing just that. At Silicon Alley Reporter, I cut and waited for revenue to come back–it didn’t. So I cut some more and waited some more. Nothing. I did this four times and it created an environment of constant depression and fear inside the company. If I had more experience back then (I was only 29 years old), I would have looked at the 500k in revenue and said “we’re going down to 10 people and we’ll build back up as the market allows us.”
2. Don’t lay people off one at a time, do it as a group. When I did layoffs at Silicon Alley Reporter the first time, I brought people in one at a time thinking it would be more humane. I thought I’d give folks more one-on-one time. The result was that folks were waiting at their desks and talking to people on IM the whole time waiting for their call to come into my office. It’s best to ask all the affected people–and the folks not affected–to come into the room at the same time. Explain what’s happening–that you’re having layoffs or reorganizing–and let the folks who are not affected leave.
3. Don’t sugar coat it: You need to be 100% honest and up front with people about why you’re doing it and what your decision was based on (i.e. how you decided who to keep and why, what cuts you made and why, etc). Give folks as much time as possible to discuss the issues together as this is going to be very emotional and brutal for everyone involved–including you.
4. Cutting salaries over headcount is *generally* not a good idea: If you cut people’s salaries 10% across the board, everyone in the organization gets really pissed off because they either can’t cover their bills or they have to downsize their lives. You then have your best folks looking for jobs and the folks who can’t find jobs staying at the company. You just lowered your effectiveness and that sucks. It’s much better to layoff the folks you need to and keep the folks you have happy and focused on completing the mission. There are a few exceptions to this, including sales people and senior management. If you’re going to face a radically different market, you might need to reboot your comp plan for sales for everyone to feel good about it.
5. Be as generous as you can: Give severance even though you don’t have to. Vest as much extra stock as you can even though you don’t have to. Offer freelance work to as many folks as you can. Offer to give amazing references to everyone on the team and to introduce them to as many potential employers as you can. If you think there is a chance that you’ll have open positions available again at some point, offer them to people.
6. Don’t drag it out: It’s better to do these type of things at the end of the day, and if folks are done with their questions, let folks leave. Folks have families and a lot of issues to deal with, and there is no need to keep them around for the entire day or for a couple of more days. The folks who are left can clean up the loose ends.
7. Get everyone focused again: After the layoffs, you have to make sure everyone understands what the goals are–even if they haven’t changed–and get folks ready to kill it again. You can’t expect folks to not be in some form of shock for a bit, but you have explain to them that the reality is that the company must march on and complete its destiny. It gets easier over time.
Wrapping up
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Frankly, I was wondering if I should even write this e-mail. It’s very personal and hard to do these things, and since I’ve done it so many times, I’m thinking these insights might be helpful to you, my loyal friends.
In related news, it’s interesting to watch the negativity and obnoxiousness of some bloggers and anonymous commenters while these layoffs have been going on. You would think that during times of hardship, folks would attempt to take the high-road and be supportive of each other. It’s amazing to me how on blogs people just lose their empathy. Almost everyone is going to be suffering during this historic time and it’s best, as a group, to support each other.
I’m so glad I moved to this cozy e-mail conversation with all of you guys. 
The technology industry is a small community, I’ve learned, and when things go bad you can really tell what people are made of. Some folks are incredibly supportive while others take the opportunity to slam folks. Being an entrepreneur–creating something from nothing–is one of the hardest things a person can do. If folks are out there trying they deserve our support.
Be good to each other.
Note: Please feel free to forward this to folks you think it would help, but please don’t republish this on the web. Note: If you want to subscribe to my email list you can do so at
http://www.tinyurl.com/jasonslist
______________________________
there is a whole lot of misunderstanding of copyright law, fair use and just plain news on this thread. Did you guys all send in ridiculous hate emails to the wall street journal when they published the peanut butter manifesto that Brad Garlinghouse wrote? nope. Copyright isn’t absolute control over your work. This is news, it isn’t a copyright issue and I support Erick’s decision to post it. If you have a problem with it, go run for office and change the laws.
Meanwhile, if someone blasts an email out to thousands of people, including us, stating their reasons for a layoff, we’re going to publish it unless we’ve agreed otherwise.
It’s also important to point out that in the past Jason has requested that we post some of his emails, but stressed that they be posted in their entirety. In this case Erick offered to post a summary after he originally posted it, and Jason declined.
Agreed, I don’t think there is any legal issue here but there is a pretty clear issue of good faith.
you’ll have to explain that.
Yes. It could be “fair use,” but Erick is bad, bad, boy… Now, go to your room!
I want it removed.
I want it removed too.
I want you and Sarah removed!
This is a *great* post: only a tried and true entrepreneur, such as MA, would understand it. Calacanis could be an unpopular businessman at times, but he has experience [and the 'scars' to prove it]
He is sharing his experience with the email –for free.
It seems that most of the comments here are made by confused wanna-be ‘entrepreneurs’ that have not done much… other than to blog around and dream…
It wasn’t an email directed to you guys. It was a NEWSLETTER sent to SUBSCRIBERS.
Isn’t it clear to everyone that this is a calculated and well though out publicity stunt by TC and in line with all the rest of their recession coverage they call “news”? Strategy being- how can we stir up as much shit as possible and get as many comments as possible with no regard for anyones businesses in the tech community that they run their business around?
Michael- you and your team have being following Glam media and pop sugar too closley and caught a case of gossipitis!
I say TC soon to be on the “layoff tracker” and heading to the “deadpool”
Leave it up
Jason – you have too much time on your hands to write such a long email.
Erick – your justification for reposting this makes me as a TC reader feel I’m complicit. You could have asked Jason to rewrite his email for public consumption or offered to do it for him. I don’t think you needed to repost his email in its entirety without letting him know. You could give him the right to reply but it sounds like he has other things on his mind right now.
This is a nice publicity stunt for all involved. Good work boys.
I normally never ever read comments but this was 20 minutes of pure fun. Heck the comments were more engaging than the email reprint itself.
Excellent post! shame on you all bashers,and TC haters, you don’t have to read it if you don’t want to.
It’s not about not reading it if we don’t want to. Some of us visit TC every day, we feel a part of it, heck, it is a part of our lives. A lot of us feel passionately about this and feel that it was WRONG. If you want to piss off the majority of your readers, go for it, but TC has just been taken off my daily-visit until they issue an apology to Jason.
Right. Have another shot of tequila… Oh! I have a puppy at my place, would you like to come and see it?
EXCELLENT POST? THE POST WAS WRITTEN BY CALACANIS & COPIED BY TECH CRUNCH!
Maybe I don’t understand something about ethics or journo’s work but disappointed by TC..
Or was it JC+TC publicity stunt?
if JC will not take action, I’ll think the later..
You can’t just ignore copyright and reprint the whole thing at will.
Copyright is a “right”, and exists even if there is no explicit copyright notice.
In this case, there was also an explicit “Do not publish this on the web” notice.
I don’t agree with much of the rubbish that JC writes, but that isn’t the point here. Republishing this was not the right thing to do. You’re no better than the spammers and scrapers for doing that.
What copyright? Have you ever seen the Memos section of Romenesko, at Poynter, the journalism news hub? Newsroom memos are submitted and published.
Copyright is to prevent people from publishing others’ work as their own; it is not a padlock. This is clearly sourced.
Suppression of news is a very bad position to defend.
This is ridiculous. Whether you like Calacanis or not, you have to admit that this is a little over the line. You guys could have at least sent him an email asking if this was ok before you re-posted is content. RE-publishing a email list is as if you’re hosting mp3’s for download. I don’t quite understand why you’d think it’s OK to disrespect him and to republish his entire work? If you say his message had relevancy to the TC community, write a wrap up post about what he said – not republishing his entire piece of work! Everybody just feels entitled to everything, and it really needs to stop.
TC, your view that it’s alright to publish other people’s copyright material verbatim because it’s already gone to n thousand people will backfire. You are basically saying “we are not trustworthy”.
2 pages of commentary – and very little about the actual email.
This is actually the first post/email by Calcanis that I actual appreciate. I find most to be a little self indulgent and while not necessarily spewing garbage I find his arrogance a little over stated in his writing.
This one however, I actual found thoughtful and meaningful. I appreciated statements about:
- honesty. but this should be ongoing at any company. there should never be any surprises. IMHO the biggest risk an employee faces is an employer that lies to them.
- don’t cut salaries.
- be generous. maybe you are cutting early – but you now have more money to be generous and to sincerely help your team transition to new employment.
I find some executives, view these events as rites of passage – but they are huge failures. When you hire someone, you are accepting a bond with great responsibility.
So are you cool with me copying all of the posts here on techcrunch all over thousands of spam blogs?
Or do you only follow the rules when it works to your benefit.
He specifically asked for the post/email to be removed, it’s just courtesy and doing the right thing to follow those requests, cause karma is a bitch.
Unless of course this is some stunt and fake fight engineered to generate some buzz … if it is kudos to the execution
Calacanis fully expected this to go public. Period. You don’t write some of the things he wrote without either being extraordinarily immature, myopic, or wanting others to read who “shouldn’t” (or all three).
This represents the true lack of real-world business savvy many of these young entrepreneurs have. They seem to think they’re walking, talking lessons in great leadership, rallying the troops at every turn, even when times are tough and you’ve got to “question every dollar you’re spending…”
The problem is, they’ve never been one of the troops, really. Granted, they’re very smart, some are even pretty visionary. I use some of their products. But talk about being out of touch. You can just read that in ridiculous emails like this. Jerry Yang’s email, too, I might add (though he’s not a “young entrepreneur”).
This should have been a conversation with his leadership team, not an email to a list of “insiders”.
I almost can’t stand it! I am the best of everything and my opinions rule!
I am the KING!! Everyone else is an idiot… and I AM THE BIGGEST ONE!!!
Better shut up now.
it is clear the aw wanted it to go public. i am lmao @ all these post in here asking why tc posted it. last i check tc and jc has a buddy buddy relationship so its clear they knew it was ok to post this message.
You can argue over copyright law all day and night, and say things like, “Calacanis should have expected this to be put out for the public,” but I don’t think you can dispute that it’s kind of a dick movie.
I *totally* meant “move”.
If this is a fake fight then I’ve been had. If not, then respect the author’s wishes from both his original request and then his subsequent request for you to remove the email. Just as easily as you copy and pasted, I can delete techcrunch.com from my booksmarks.
In case someone is counting or taking a poll, I also say that this post needs to be removed and apology issued. I am a regular reader.
R
I am a regular reader. I also spank my tiny monkey regularly.
I’m not a regular reader. I watch television regularly though.
I am a regular reader. I am not a regular reader
I watch television regularly though and, regularly, spank my tiny monkey!
Erick:
Good work! This email adds insight to Calcanis’ action earlier in the day. Thanks for sharing.
How can you folks complaining about this not see this post for what it is: utterly transparent linkbait.
Jason Calacanis is as shrewd a communication channel navigator as there is. Jason and Mike A. put on a conference together for christ sakes…you don’t think they talk on a cell phone directly/frequently.
IMHO people are complaining because as members of his mailing list they felt like they were somehow special;privy to a private conversation…like they had a line of communication that the rest of the net doesn’t. Too bad their private conversation channel is only a one way street.
It turns out when Jason needs a wider audience or a louder signal, he can and will use both his blog and the entire blogosphere as a mouthpiece.
You can’t hate him for it, hell you have to envy his skills.
you and me are the only few bright folks here that see this.
“Too bad their private conversation channel is only a one way street.”
So it’s not possible for people to reply to his email? Or for him to redistribute those replies if he feels everyone could benefit?
And I would imagine that he would have the common courtesy to ask the original emailer if he minded having the reply circulated.
I know I try to resolve all my personal conflicts via Twitter!
It’s possible to reply to his email. Never tried it, but he does encourage it. He’s said in his emails many times that he will republish the best replies he gets…but I think we’re still waiting on that (I haven’t seen him publish any of them yet).
Erick – I quite agree that posting this was out of line. Of course, it’s also possible that you and Jason did this on purpose to have a great conversation. I’ll try to not be too cynical… but if that is the case then TC has lost some goodwill and Jason has gained quite a bit of sympathy (despite how some people just love to hate the guy).
As to the content – it’s a great missive. I’ve been in similar situations many times and downsizing a team is just one of the hardest things you can do. 90% of the time you don’t cut deep enough and have to do it over again.
One thing I thought of is Erick you state Jason sent the email to you. The only reason you received it was because you subscribed. It wasn’t sent to you because of your news reporting.
If Calacanis didn’t want his cold description of his process published, he shouldn’t have sent it out in an email. You fanboys/girls need to get over it.
Jason, I have long enjoyed your writing and admired your entrepreneurship.
Is the issue that you want to protect the privacy of those affected by Mahalo’s layoff or profit from the newsletter?
A letter to nearly 9,000 people is already public, so one would assume the real issue is, as you say, your ability to run “my newsletter business”?
Erick is treating you like the CEO of Mahalo, not as a newsletter publisher. Presumably, as Mahalo CEO you would only publish the newsletter if at some level it was in the best interests of Mahalo to have its contents reach a wide audience, not because news about Mahalo would benefit your newsletter.
In many ways, I think publishing Jerry Yang’s email to employees is more aggressive than re-publishing your newsletter. Given Yahoo’s scale, Mr. Yang had no choice but to communicate with employees in a way that would become public. You had a choice, and you’re such a better writer than Mr. Yang that it was a good choice, for you and for Mahalo.
After reading your letter, I believe in Mahalo and the decisions you made to build its business. Best of luck, and go Mahalo!
Thank you. Finally, someone explained this in a way my tiny dick movie can understand.
Seriously. Best argument for or against I’ve read throughout these inane comments.
This whole thing is a bit ugly.
Jason obviously went through a painful personal process in making this decision, and I can feel his pain as he poured his heart out as to why he had to make that decision.
And then someone he thought was his friend betrayed him. Because ultimately he’s a journalist first and a friend second.
Makes me glad not to have any journalists as friends. And TechCrunch just became a little bit more ValleyWagish. And a bit more George Bushish with the “I can’t admit I was wrong” mentality.
The right thing would be to take this down and replace it with a proper summary. And apologize to Jason. It’s not too late.
Please disregard my comment. I don’t know what I’m talking about…
I am 12 and, really, I don’t know anything about this.
IMHO this was written fully knowing it would get out to the wide world. Nevertheless, it has a useful list of things to do when you’re laying off folks in order to give them the respect they deserve…I’m sure this will be helpful for young and green entrepreneurs and first-time CEOs.
If you don’t want the email republished, why not copyright the newsletter?
My boss was at a Liberty Netleaders forum, during one of the Q&A sessions a guy piped up with a question and said “Jason Calacanis says….” And the speaker responded “first, you should NEVER quote Jason Calacanis. You lose all credibility immediately if you do.”
Count this as another vote that Erik was wrong to publish the email. If this were a bigger company I think you would be in much bigger legal trouble.
Look, aside from the fact that you just basically threw water in Jason’s face and have negatively impacted that relationship, you (and TechCrunch in general) have something much bigger to worry about: basically, this is a strike against you guys in the mindshare of the general space where you work. Anyone who is thinking about sharing information with you is going to remember this, and will think twice about it.
Well, I think one thing’s clear– don’t talk to the Techcrunch guys!
Another case where TC must be a jerk just to make a point. Grow up and become a real journalist. Not a bedroom blogger.
Schonfeld doesn’t know how to paraphrase and Calacanis’ newsletter is long and boring. The real question is where are the Seesmic Video comments about this non-issue?! I’d love to hear some self-absorbed rambling on this topic.
Who wouldn’t?
Three quick points:
1) Tech Crunch may be violating JCs request, but big deal. He’s a nut to think he can send an email to 9,000 people and not have it re-published.
2) JC makes some great points about layoffs. Very interesting read.
3) This is what baffles me: they cut just under 10% FT and have 30 FT left. So we’re talking about 3 people here??? Does that merit a manifesto and 150 comments?? Is that even a layoff?
TC is right to publish this. It’s newsworthy.
Well, I have just read the update. I was hoping you would see the error of your ways TC but obviously not. I don’t give a damn whether you think it infringes copyright or not. The fact is, he asked you not to publish it and you did. Which means you suck. What makes you suck more is your attitude and response to the majority of your readers who make this site exist, by ignoring their request to take down the newsletter you re-printed in full.
I will no longe be visting this site and have un-subscribed to your feeds. Ciao.
A brief notice to everyone.
There will be a global 1 minute silent moment in memory of penname “Sarah” unsubscribing from the TechCrunch RSS feeds tomorrow at 15:00 GMT.
Words truly cannot express the significance of this moment in history. There is truly nothing else to say.
I would request at least 3 minutes of silence, while she sucks one of us…
You use the word “suck” quite often. This is intriguing and disturbing, although its meaning could be quite pleasurable for us geeks, who are generally socially awkward…
Would you consider coming to my place tonight?
Mahalo is a big subprime tech start up that is being kept around like a zombie corpse with massive amounts of VC cash.
Why would that give a godlike ability to discuss layoffs like you’ve found a way to turn lead into gold? Please.
Well, you can tell where Erick is headed with his tweet (http://bit.ly/1ukjZi):
“@JasonCalacanis news trumps copyright, sorry”
Allow me to enlighten you, boy. Imagine if this was an image or video, the litmus test immediately says you have to respect the copyright holder. End of story.
The email was original content, whose author has asked you to take it down (for whatever reason). Do the right thing.
TC treated this as they would if it had come from any other company. It may ruin friendships. But, I respect that they didn’t let that affect their decision to publish what they saw as pertinent news.
Jason explained the concept of his email newsletter in a recent episode of TWIT. It never had anything to do with generating income.
OK guys – give up about the publishing of the newsletter because you are missing something a lot more fundamentally newsworthy here.
**A LOT OF CONTRADICTIONS **
—
Contradiction #1: 17% not less than 10% were laid off…
“The fact that he was able to minimize the number of layoffs to only six people”
“We still have 30 full-time folks in our office”
6/36 = 16.7%
“We’ve laid off a just under 10% of our full-time staff”
—
Contradiction #2: The amount of capital available
“We can now operate past 2012 even if we never make any advertising revenue”
“The net result of the effort is we are giving Mahalo another year of “dry powder” (or runway) to complete our mission.”
So they’ve went from 3 years to 4 years from these layoffs and some other minor moves?
Lets analyze the true cost savings here:
“…but rather the $10-12 an hour “remote guides” we have working from home. These editors cost us, all in, less than half of the folks in our office due to things like overhead, benefits, lunch, and equipment.”
Therefore fulltime employees cost ~$25/hr or about $52,000 per year.
6 employees * 4 years * $52,000 =$ 1,248,000
Now $1.2 million sounds like a lot of money but for fun let’s assume its $1.2 + $800,000 in other cost savings which it is not.
$2 million for an extra year means $8 million (4 years) in funding.
“we raised $20 million over two rounds of funding before we launched”
—
Perhaps I am missing something in the imaginary world of startups but this does NOT add up.
Either Mahalo burnt through $12 million in funding in one year and/or Mahalo’s total budget was always between $5-8 million…
Or this is all just B.S.
Comments?
PLEASE DO NOT READ THIS COMMENT
If someone respectfully requests that others not read his own content, don’t you think it might be courteous to respect his wish?
I asked you not to read this comment and you did.
Which means you suck.
Now take it down from your memory,
and issue me an apology.
A cupid stunt if ever I saw one
What a windbag. I could have condensed that email down to about 200 words.
I could never work for such a tool.
Reading the comments is the best part about this post. You guys are hilarious. Moma Calacanis? lolzzzzz
never commented here before….but I thought the email was great, takes a certain bit of courage to talk about stuff like this. Thank you Jason for sharing and thank you TechCrunch for posting.
I’ve got no problem with TC’s reasons for posting this, they are hard-headed and reasonable (if a little insensitive).
But does this mean that Michael Arrington will stop whinging every time someone else does something he doesn’t want them to but that they are perfectly within rights to do?
FYI – TechCrunch is not the center of the universe and neither is Jason Calacanis.
So much drama must be good for business though.
I fucking hate those DMCA takedowns as 99% of them are bullshit. But why stop here at just one post? Why not post every single one of his newsletters. You already posted one, why not two, or three, or four hundred.
I’m no lawyer but it sounds like copyright infringement. Just because someone sends something out to 9000 people doesn’t give you the right to repost it in its entirety. So if the next Harry Potter book is given away free via email to 9000 people and it says do not redistribute, we can do so anyways because you think it’s newsworthy.
Nice logic there.
Hmmm…not that useful info. Can we have some useful stuff rather, what TechCrunch was meant to be?
Honestly – who the fuck cares. Cause Jason’s poor little celebrity heart is hurt? COME ON.
Like come on, really.
Get over it.
Come on.
Right….. for reasons I now cannot explain, I just read all 194 posts – which is a tad ironic given I didn’t read the original JC email when it hit my inbox as I was busy and it seemed unnecessarily verbose!!
So – in summary – an email incorporating a (legally meaningless) request to abstain from republishing was sent by a company’s CEO to 9000 people and was later republished on a tech blog, resulting in well over 100 bile-ladened posts of “commentary” and threats made against the well-being of those responsible for choosing to republish.
In (perspective enhancing) news outside the Sandpit of Silicon Valley………
Thousands of citizens of Zimbabwe, Darfur and Congo continued to lament the lack of food, water, shelter & mentally stable Government leaders …… oh and decent internet access in refugee camps of course!!!
Anyone around here attending the next Davos conference????