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Dropbox Cuts Several Employee Perks as Silicon Valley Startups Brace For Cold (businessinsider.com)
Not everything is working out at Dropbox, popular cloud storage and sharing service, last valued at $10 billion. Business Insider is reporting a major cost cutting at the San Francisco-based company. As part of it, the publication reports, Dropbox has cancelled its free shuttle in San Francisco, its gym washing service, pushed back dinner time by an hour and curtailed the number of guests to five per month (previously it was unlimited). These cuttings will directly impact Dropbox's profitability. According to a leaked memo, obtained by BI, employee perks alone cost the company at least $25,000 a year for each employee. (Dropbox has nearly 1,500 employees.) From the report: Dropbox isn't the only high-profile startup to unleash a company wide cost-cutting campaign lately. A number of unicorn startups, worth over $1 billion, including Evernote, Jawbone, and Tango, have all gone through some form of cost cuts, whether layoffs, office closures, or reduced employee perks. [...] A lot of this has to do with the slowing venture funding environment in Silicon Valley. Investors have become much more conservative with their money lately, and are losing patience for startups that have failed to generate returns after years of free spending. For Dropbox, the cost cuts may have less to do with the state of the VC market than with its own ambitions. Dropbox CEO Drew Houston has repeatedly said in the past that he doesn't need to raise capital in the private market anymore. Instead, Dropbox may want to show investors that its business is strong enough to IPO.
Not everything is working out at Dropbox, popular cloud storage and sharing service, last valued at $10 billion.
Nope, and I quote "T. Rowe Price marked down its holdings in Dropbox by 51% in the fourth quarter of 2015". This places a valuation of $4.9 billion, down from $10 billion. Fidelity and Black Rock had similar mark downs for their holdings of Dropbox.
Money spent on perks is money spent on the actual business. Giving incentives for skilled employees to work for you is a core of business
And the fact that "dinner" is considered a perk demonstrates why anyone with a life outside of work should never, ever consider working for a startup.
On a side note... it seems to me this announcement also did double duty as a passive-aggressive method of informing Dropbox's workers they'll be expected to work an additional hour each day, going forward.
#DeleteChrome
Well my view is that the business model for some of these companies never made that much sense. But then again, I don't see much value in forcing users to endure advertisements of some sort or another, and at the end of the day the infestors really only saw that there were potentially a lot of captive eyeballs, and the possibility of more targeted marketing.
So now the infestors are weary of throwing money at these companies when they still haven't demonstrated how they are going to get repaid. And now the companies need to tighten their belts. None of this is a surprise. My guess is that 5 years from now, a good number of these unicorns will be out of business.
The employees will come away with something on their resume, and they will have stories about the stupid money that was floating around in the "good old days".
You might be living under a rock, both those two are pretty well known though I'm not personally convinced they're worth that much.
I just did a google check of "gym washing service" and all it came up with was companies that wash school and fitness centre gymnasiums.
Could somebody please explain what that is and what employees were getting out of it?
Now, if it was an auto-correct fail, I do have some soiled Jims that are pretty stinky and such a service would be of value to me.
Mimetics Inc. Twitter
ah, memories of my old pet goat.
had to sacrifice him, though; the SCSI bus demanded it, for some reason. don't ask, I simply followed directions from a USENET post and that was all it took.
--
"It is now safe to switch off your computer."
Washing clothes while the employee is at the company gym.
Catalin Braescu
Ofaly.com
5% ownership . . . of what?
Of the company. Which means, among other things, 5% of future profits.
And where's the other $950 Million of that 1 Billion?
Equity.
but what if that $50M is actually the only money I have? In reality, my company is only worth $50M.
No. A company's value is not the same as the cash in their current account. Not at all.
I thought Dropbox had terminally jumped the shark when they put Condi on the Board of Directors. Certainly I left then, and any time I've pointed it out on a project where they have said "let's use Dropbox" they have immediately changed their minds. I had no idea they'd managed to bloat their operations to over a thousand people.
To the any employee of Dropbox: Brace yourself. Winter is coming. It seems long overdue, in fact.
How is the Riemann zeta function like Trump rallies? Both have an endless number of trivial zeros.
The only unicorn i have ever seen was a mule with a strap-on dildo on his head.
To me, most of these unicorn startups look just as stupid.
Death has been proven to be 99% fatal in lab rats.
When every other provider on the market was offering cheap storage (including Google and Microsoft), Dropbox refused to drop their prices. They were charging for 100GB what everybody else was charging for 1TB. As such, they lost a lot of customers to the competition, and a lot of customers who could have been producing revenue stuck with the "free" tier rather than pay $10 a month.
They've sort of learned their lesson, now offering 1TB for $10/mth, but still haven't quite caught on yet: they don't have anything between $0 and $10 a month. A lot of customers who want a bit more than the free tier, but don't want to pay $10/mth, aren't being served. Google will sell you 100GB for $2/mth, and I bet Dropbox is leaving a lot of money on the table by forcing people to pick between Google at $2 or DropBox at $10.
It is fun to sit in your mom's basement and explain why you are so much smarter than those stoopid billionaire VCs,
The VCs are smart, but in an indirect way. To me, dropbox has no value. It exists only because transferring files between windows computers seems "difficult". But file transfer is not hard for those who know how - so Dropbox seems like a solution to a non-existing problem to us. Also, Microsoft could bundle ssh/scp in their next release - or make their own similar third-party service. Dropbox would be gone in a year.
But a VC doesn't care that dropbox isn't "a necessary service". They see that they fill a niche right now: file transfers for the stupids. They can monetize that, even though those in the know has better methods. (Better in that files are transferred directly from machine to machine, no waste of time going via a central third party - also no risk of that third party getting hacked thus breaking confidentiality.)
It's going to depend on how you measure "worse". Unemployment is already massive this time.
Let's compare measurements. I think today is better than yesterday.
I was out of work for two years (2009-10), underemployed for six months (working 20 hours per month), and filed for Chapter Seven bankruptcy in 2011. There were seven job applicants for every job opening (a normal economy has two applicants per job opening). Recruiters weren't calling and the few I talked to told me I was unemployable.
Today I'm employed for government IT on a contract that's fully paid out for the next three years, great benefits (no pension) and job security. Recruiters call me 20 times a day to offer positions that pay 40% more than I currently make for less benefits and no job security.
1500 hundred people to run a file server.
Reminds me of this picture from the 1990s:
https://s-media-cache-ak0.pini...
"Well, good luck finding a judge that doesn't run a bestiality site."
It's one of those things designed to suck up all of the investors money while not actually getting any work done. Many startups, especially those run by young people, act as if money is free (in their life long experience they may as well be right), whereas companies that need to make a quarterly profit have to scrimp and save (relying on used foosball tables).
And the fact that "dinner" is considered a perk demonstrates why anyone with a life outside of work should never, ever consider working for a startup.
Bah.
You're assuming that the offer of dinner tells you something about required work hours. It tells you nothing about that. It may be that employees are required to work long hours and company-provided breakfast and dinner are indicators that employees should be at work before breakfast and not leave until after dinner. Or it may legitimately be a perk, a company-provided convenience for employees who are working late because they don't come into the office until 11 AM or because they actually choose to work long hours because they're excited about their projects and enjoy what they're doing.
The existence or absence of perks like meals doesn't inherently mean anything about expected work hours. If you want to find out what expected work hours are, you have to ask people who work there.
it seems to me this announcement also did double duty as a passive-aggressive method of informing Dropbox's workers they'll be expected to work an additional hour each day, going forward.
I think it's far more likely that the change is intended to dissuade employees from grabbing a free meal on their way out the door, to reserve the perk for the people who are legitimately working later and save money on food.
> The employees will come away with something on their resume, and they will have stories about the stupid money that was floating around in the "good old days".
That sounds vaguely familiar. ;-) Just about 20 years ago, actually.
"So long and thanks for all the fish."
I'm surprised the benefits last this long. Personally, I was stung by Dropbox. I was offered a campaign that promised 'unlimited storage for photos and videos' via their app sometime back. I used about 25 GB or so before the campaign ended only to discover that at some point the 'unlimited' offering disappeared. I could find very little mention of this 'unlimited' offering, and the fact I can't even DOWNLOAD (back up) the videos/phones I took that went over the newly imposed limit (due to a limit on download sizes) means that I basically lost access to those files. Dropbox is now, and forever, dead to me. Instead I pay Microsoft for a decent amount of storage and an office 365 subscription.
To me, dropbox has no value.
How very special for you. Don't use it then.
It exists only because transferring files between windows computers seems "difficult". But file transfer is not hard for those who know how - so Dropbox seems like a solution to a non-existing problem to us.
Dropbox is not just a file-transfer tool. It's value is that it does all the syncing work seamlessly, without the user having to do a thing and saving them time. Perhaps your time has less value, so you don't care about that.
Also, Microsoft could bundle ssh/scp in their next release - or make their own similar third-party service. Dropbox would be gone in a year.
What do you think Microsoft OneDrive is? Introduced 8 years ago.
file transfers for the stupids
I really hope you aren't actually employed anywhere in the IT industry. If so, those "stupids" are the ones ultimately paying your wage, allowing you to maintain that obnoxious superior attitude.
Employers' perks and work environments vary greatly. Even some established employers lavish perks on their employees, with the intention of keeping them working longer. Some places are just crappy to work for perks-wise, but the reality is that IT and development people are treated pretty well all things considered. If you don't get perks, at least you get a reasonable salary (for now.) I'm not trying to say "be thankful for what you've got" but comparing an established product-selling, cost-managing big boy company to an Internet startup isn't a fair comparison.
Everyone values perks differently. My current employer offers very little beyond free coffee in the non-monetary department. But it works for me -- I have an office, I'm not on call 24/7, I have a short commute, I get to travel once in a while, the pay is decent and the company pays a very generous match into our 401(k) accounts, a concession for them killing pensions. Compare that to two other examples:
1. I have lots of friends who work in the state university system. Free food and laundry style perks don't exist, and the salary is below average. The trade-off comes with non-tangible benefits though; you have to try extremely hard to be fired or laid off, health coverage costs a lot less, retirement is 100% covered and guaranteed, union representation means you'll always get salary increases, and you get to work with generally smarter people. I've considered this for a time in my life when I don't need a big salary anymore, but the pay is just too low for me to take given current expenses. "Stability" is a perk, though it may not be to someone who doesn't need it. Give 20-somethings a few years and a couple of kids; stability will suddenly jump to the top of the priority list.
2. I also know a bunch of people who work for "all-inclusive" employers, some for Microsoft or SAS and some for SV tech companies. Especially the ones that offer free dinner are basically trying to continue the college dorm lifestyle. It makes sense, if you're 24 and have no commitments, why not take advantage of it? Even the Microsoft guys say that Microsoft tries to do everything they can to keep you working longer -- "frictionless" is a word I've heard mentioned, and I saw it on a visit to their HQ lately. Established employers do tend to age however, and it becomes less important keeping the kids on campus 18 hours a day.
I've been working in a diverse set of environments over the last 20+ years, and it's interesting to see the dotcom bubble being replayed in Silicon Valley/San Francisco in almost identical fashion. Once the unlimited VC punch bowl gets put away, startups start having to act more like real companies. The surprising thing from the article was that these cost-cutting startups are worried about retention! As if it was normal to have 3 free meals a day, shuttle service from Hipster Central to the office, free laundry service, etc...