Vimeo laid off most of their operation in Israel recently.[1] At least according to "www.calcalistech.com", which seems to be some minor news source in Israel.
Their comment was that the office was damaged in a recent war. Rebuilding may not have been worth it.
Someone that worked at Vimeo until last month tweeted:
> Reviving this account to say: Almost everyone at Vimeo was laid off yesterday, including the entire video team. If you're looking for talented engineers, there are a few on the market.
They're not publicly traded (they appear to be pre-IPO "startup", made out of acquisitions), but it seems weird to me that there can be such a thing as secret layoffs.
I know this wasn't an entirely honest question, but yes, absolutely. You probably see Vimeo videos every day without realizing it, because most of the viewing isn't done on vimeo.com. It's videos on other sites, and the customers can pay to have their branding, not Vimeo's, so if you're buying something online and it has a product video... might be Vimeo. Or one of those websites that have big header splashes with full-video backgrounds. Or a subscription "channel" like Martha Stewart TV with mobile and smart-TV apps. Or a million other things.
Once at Vimeo, maybe 7 or 8 years ago, I was working on putting out the fires of an extremely weird operational issue where a bug in a cloud provider's software-defined networking stack led to corrupted HTTP responses, which got stored in CDN caches, causing persistent playback issues for users (playback not starting, or locking up in the middle). The cloud provider had reported it as a "packet loss" issue, because for the most part the misdirected packets would get rejected by the receiving TCP stack for having the wrong sequence number or whatever, but one time in a billion they would get through and wreak havoc... and we were moving enough traffic that those one-in-a-billion flukes were happening constantly.
I was musing in the shared chat with one of our CDN partners that, with no real way to tell what files were affected, the only way to fix the playback issues for everyone (short of waiting a month for all the cached objects to age out) would be to simply purge the whole cache. I immediately got a bold all caps DON'T EVEN THINK ABOUT DOING THAT in response. If we flushed the whole cache, the origin traffic to refill it would have saturated some internet links to the point of DoSing other customers and probably getting on CNN that evening. And that was then. Traffic levels got significantly higher later on.
My local karate school used them in the COVID era to build an app for practicing at home. I've used it off and on, though the occasional oblique reference to COVID is a bit amusing sometimes. Never mentioned by name but there's an occasional reference to "as we're stuck at home" and such. They use Vimeo to whitelabel the service.
Whatever they're paying for it, it is too much. Video availability drops in and out. Sometimes the video works. Sometimes it doesn't work at all and gives a weird error. Sometimes it doesn't work and it claims that it "can't guarantee the security of my connection", even though other videos work fine. Sometimes videos that didn't work yesterday work today. I've been tempted to go to their app developer and try to show them how to just host it themselves in S3 or something, which would probably still be much cheaper than what Vimeo is charging. The Vimeo player embedded into the app is extremely minimalistic, for instance, it can't cast to anything, which is a pretty useful feature for something you don't want to be staring at your phone for.
I found I can Favorite a video, which then makes me log in to a Vimeo account, then it adds it as a Favorite to my Vimeo account despite being private, and then I can view it through the Vimeo app proper, although that also seems to have lost the ability to cast to anything in my house lately. Casting is a clusterfuck of its own with the mismatched capabilities matrix of what can cast to what under what circumstances anyhow, but Vimeo seems distinctly behind on that front. It's honestly significantly worse now than the default video player a browser offers at this point.
But it was probably relatively easy for them to set it up ~5 years ago, before Vimeo collapsed.
A notable difference to their (somewhat) contemporary, Nebula. Nebula made the choice to develop their own services, to also own the customer billing relation. Dropout relies on Vimeo for all that.
Are there other services doing whitelabel video sites? (Apart from porn, I'm sure there is a few) I only know of Floatplane providing whitelabel for William Osman's sauceplus.com recently.
They have 1000s if not 100s and 1000s of customers. I know because my company is an edtech platform and we have a lot of customers using vimeo as their video host.
I recently used it to watch "Revolution of our times", a documentary about the 2019 Hong Kong protests. As far as I could tell, this is the only legal way to stream the movie.
The BusinessInsider story is as much as you're going to get right now, because Bending Spoons is declining to provide specifics, and those just let go aren't free to tell all. But yes, "globally" means significant cuts in New York and the US in general.
Calcalist is the news source for the tech community here in Israel. Admittedly the English site is complete rubbish compared to the Hebrew site - but it's still THE local source.
As always, claims like this should come with the WARN Act notice record. There's only been one notice in NYC in 2026 (visible at https://dol.ny.gov/warn-dashboard) and it's not Vimeo or Bending Spoons. I don't see one in Q4 2025, either.
I am surprised so many people don't understand the business model of Bending Spoons or are bewildered by it.
In conventional infrastructure and product development you need engineering staff to build the product; once the product is built you need very little engineering. If you build a house you don't keep the builders on payroll once it's built to keep "building" it - you may need maintenance staff but that's it - if you need to keep the full team of builders around then something is wrong and you may want to seek a refund for the original builders' fees since they did not actually finish building it.
Builders and electricians and tradesmen either work as contractors and take that into account (charging higher rates to compensate for the sporadic nature of the work) or work full-time for companies who then resell their services on building projects (charging accordingly to ensure there is enough revenue to pay a full-time payroll of said tradesmen).
Tech was an outlier in this case because ZIRP allowed companies to retain full engineering teams to keep "engineering" the product even once product-market-fit has been achieved and the product has been stabilized and finished. This gave a lot of engineers the illusion that perpetual "engineering" of a single product/service is a sustainable model and career.
Bending Spoons' business model is to buy finished products, cut off the deadweight and keep operating the product and actually making profit off the finished product, which was always a normal thing in every other industry.
For tech people that see themselves as builders, this should be normal and expected - they should charge competitive rates for their services taking into account the expectation that they're building something for someone else to make money off once it's built and that they won't be part of it once that's done (unless they want to negotiate an actual stake in the company). For tech people that don't, this is a difficult wake up call, but the earlier the better - the old situation was never sustainable to begin with.
The economics are different because the industries are fundamentally different. Software is never "finished" the way a building is finished. More features can always be added to software. If those new features create new product lines and attract new revenue, then the software engineers' salaries are more than paying for themselves.
But, this obviously carries risk, that the new thing you develop won't be worth as much as you spent. Bending Spoons doesn't want risk, hence their decision.
Software may never be finished (in your opinion) but the budget of any customer is finite. If you keep reinvesting your revenue forever into "engineering" the product there's going to be a time where a competitor comes in with a finished product matching your customers' requirements and snatches him from you by both charging less and making a profit.
There’s also the much more common case of a competitor coming in with a similar product that has a few more features matching the customers’ requirements… which explains the endless product development treadmill that companies find themselves on.
Software doesn’t win by being “finished” it wins by out competing other software
Yeah, if Youtube was "finished" we wouldn't have had Youtube Red, Youtube shorts, Youtube music, etc.
And yes, I am making a good case for mature software with those lovely examples. But clearly they wanted more widgets and they kept engineers who can deliver those widgets. This wasn't some unsustainable thing for Youtube as the top comment argues. And that's how most software businesses work as of now. If you remain complacent, you're slowly dying to competition. Because the demand for more still exists.
The number of customers is, effectively, infinite though. YouTube continues to be engineered and continues to grow. It could have, realistically, been finished over a decade ago. But they repeated branch out into new markets with new features, and that seems to work from them.
But YouTube is still a growing and maybe a profitable business (they disclose its revenue but not costs).
Bending Spoons buys stalled or failed products and keeps them alive with a central engineering team in Italy which is far cheaper than anything in the US.
That's their business model. If the company you work for is acquired by them you should start looking for a new place.
The new features are an order of magnitude less complexity to build than the main feature - hosting video at scale, which is complete and just requires maintenance.
I'm going on a limb here and saying that the scale that YouTube was running on back in 2010-2015 is not the same scale as now, and if they had left their whole infrastructure unchanged, a "finished product", so to speak, the site would have been feeling dated and would have eventually been killed off.
Without having access to the source code we can only speculate but I believe even in those days YouTube already outgrew vertical scaling and thus had to be built as a horizontally-scalable system. That is the hard part.
Adding extra nodes to an existing horizontally-scalable system (that has already been operating and has its bugs ironed out) is much easier.
That is really a bit of an oversimplification IMO. Please check, for example, the Netflix tech blog and read about what has changed in the past 10 years or so when it comes to architecting video processing and video delivery systems. There's a tremendous amount of engineering work there which advances the entire industry. For instance, it's not trivial to add live events to a VoD infrastructure at that scale — it's not like you just add a few more nodes and buy faster encoders.
Potential revenue growth is only as finite as your ideas (and ability to execute on them).
Just look at Google. They could have stopped writing new software at any point and been just fine. But in the long run they'd have missed out on trillions of dollars.
As with everything in business, it comes down to risk/reward. Not every risk pays off, but some do.
But for every outlier that can perpetually keep unlocking new revenue streams with more features, there's probably 100 companies that burn themselves out trying to do the same and end up sold for pennies on the dollar.
The key is knowing when to stop. Unfortunately permanent employment does not provide an incentive for anyone involved to speak up when they think it's that time.
>for every outlier that can perpetually keep unlocking new revenue streams with more features, there's probably 100 companies that burn themselves out trying to do the same and end up sold for pennies on the dollar.
Okay. Most businesses also fail. Is that a reason for existing ones to stop growing?
> Not if you find new ways to appeal to them once you have them as users.
Doch, even then.
Back at university, we had practice sessions about our CVs and job interviews. Mine had a cliché in it, "committed to quality"*. The businessperson who was helping us figure out how to be any good at the jobs market, picked up on it with an example:
Which is higher quality? A Porsche, or a go-kart?
We nodded at "Porsche", as was the point.
Except no; you didn't consider who the customer was. If this is for a kid who just wants to have some fun, they can't afford a Porsche, they've got no insurance, they don't know how to drive. A go-kart solves their problem, they get to have fun, a Porsche doesn't.
(I'm paraphrasing, it was over 20 years ago now).
* I was 19 or 20 when I wrote that, it was about as true as when ChatGPT writes the same: I didn't know any better.
This is a weird example because there are crappy go-karts and there are carefully designed and assembled go-karts. You can have a high quality anything: car, truck, go-kart, trailer, wagon.
Even then... you reach a point where any additional quality or craftsmanship offers no more value. Aesthetics can have some arbitrary value, but even then it's a matter of taste.
> Software may never be finished (in your opinion) but the budget of any customer is finite.
The reason why software companies grow, is because businesses demands growth.
I suppose you could build a simple, small app and leave it on "maintenance" (even then, it's going to be difficult due to crumbling infra) but real world products don't work that way.
Companies want to scale, add features and expand to various verticals. They also have to compete with other companies , there is regulations, compliance and never ending list of incoming features from sales, marketing and customers.
Elon Musk famously attempted to run Twitter "lean", and look how that ended.
Unless you are able to curb the corporate greed, you will need to grow your engineering team.
> The reason why software companies grow, is because businesses demands growth.
There's only so much growth you can achieve in any vertical - the key is to realize when you've hit that limit and cut your losses. Unfortunately as a company employee you have no incentive to do that.
I doubt Vimeo would've sold if there was still lots of growth potential on the table. They've exhausted it, and for various factors were unable to cut costs internally.
Bending Spoons evaluated the situation and determined they can still extract a certain amount of profit by massively cutting costs - they gave chunk of said expected profit to the current owners, and are now implementing said strategy.
> Elon Musk famously attempted to run Twitter "lean", and look how that ended.
The decline of Twitter has all to do with Musk's politics and lack of any kind of strategy of the product (makes sense if you see it as his personal mouthpiece rather than a business). Tech-wise it seems to be working well enough. Cutting 80% of expensive engineering staff for a 1% drop in uptime of a non-critical service with no SLAs is a no-brainer.
I'm not really sure this argument makes sense. Plenty of software I've built is finished, it does the thing I need it to do and I haven't touched it in years. Adding features just because is not a useful way to spend anyone's time, doubly so in a business context.
> Adding features just because is not a useful way to spend anyone's time, doubly so in a business context.
You could make this statement about anything. "Building a new hospital wing just because is not a useful way to spend anyone's time", "Adding an extra drive-thru lane just because is not a useful way to spend anyone's time". The point is that it's not "just because", it's because you believe it can grow your revenue.
On the other hand, if you don't believe that, then don't invest. Nobody's saying you have to. If you think my comment is saying that, you've misread it.
> You could make this statement about anything. "Building a new hospital wing just because is not a useful way to spend anyone's time", "Adding an extra drive-thru lane just because is not a useful way to spend anyone's time". The point is that it's not "just because", it's because you believe it can grow your revenue.
You can, but do you really need the same sized team to add an extra lane to a drive-through as you needed to build the entire restaurant's building, kitchens, etc?
Do you need the same sized team to add a new wing to a building as the team that built the existing building(s)?
Hospitals expand because they either already don't or they project they won't meet demand. It's the same story with drive-thrus. These are things that are measured and analyzed. Adding features in the blind hope that more features equals more revenue is exactly how companies stagnate and burn. There's plenty of successful software products out there that are finished as far as the feature set goes, you'll find they power most of the industries outside of IT.
The businesses they acquire are ones whose revenue has not appreciably grown in many years. They are being sold because the prior owner does not believe they can improve the business any more.
Any profit bending spoons earns they can run off and invest in another business if they like. They don't bother investing in the businesses they purchase because they believe, like the previous owner believed, that there is no more juice to squeeze from that particular lemon.
>Any profit bending spoons earns they can run off and invest in another business if they like
And the ones who helped make Vimeo what it is? left out in the cold to fend for themselves.
This is why loyalty is dead. Maybe if this billion dollar aquisition benefitted the workers there'd be less hard feelings, but that's not how capitalism works.
It is absolutely true that software can be finished, it's just that software appears to be dead if it hasn't had any work done on it for years. You don't need to keep adding features and changing the software ad infinitum.
Just like with your building analogy and with other car analogies presented here, software does need some maintanence every now and again to keep it up to date - with security fixes, compiling to a newer platform, integrating fixes from dependencies, etc. And yes while buildings may be finished they stil require regular maintance if they are used.
My argument is that the maintenance overhead of a finished product (or car, or building) should require much less effort than what it takes to build it - otherwise you should seek a refund from the original manufacturer(s).
That's absolutely not true in pretty much any mid scale software. You can have a team of 5 people make the core of an app, then need 50 people to help with support for customers. scaling up is never cheap, but software scalability is really low despite that.
That's not even true with a car. I'm about to spend 3000 dollars on a big repair for a car I bought 9 years ago used @ 3500. Even if you adjust for inflation we're still talking about 70% of the car's worth just to keep it running. As for a refund, the blue book value tops at 850 dollars.
> I'm about to spend 3000 dollars on a big repair for a car I bought 9 years ago used @ 3500. Even if you adjust for inflation we're still talking about 70% of the car's worth just to keep it running.
That's one way to run that ROI, sure, but is it correct?
1. The original $3.5k you spent is a sunk cost; you should ignore it, so your total cost of getting a running car is only $3k.
2. Even if you don't ignore it, your total bill to get a running car is $7.5k
In either of the above situations, you should be comparing the cost to get a running car by fixing your existing car (either $3k or $7.5k) to the cost of getting a running car by selling it as-is (so, perhaps +$500 as a parts donor -$X for a replacement running car).
Regardless of which calculus you are using, it's still going to come cheaper to fix the running car.
What the car is "worth" (however you define it) is irrelevant to the calculus.
That actually depends what kind of application you are building and maintaining.
From the sounds of it I assume you're talking about developing and maintaing a SaaS application, where there is no real maintanence of it, and instead what you end up doing is developing it further to support larger data sets and more people. That is of course assuming that the software is successful and the usage is growing.
For traditional desktop software you can declare it finished and then maintanence is minimal and limited to only critical bugs, so you'd have a team of 5 develop it and then 1 person or less maintain it.
> Software is never "finished" the way a building is finished.
On the contrary, it absolutely can be, in both directions.
Software can absolutely be "feature complete", and in the case of many products it would have been an improvement to say "we're done now" and switch from developing new features to maintenance-only mode, dealing only with API changes and new laws.
Some examples of where it should be "done" by some point include smart TVs and smart lightbulbs. I'm also old enough to remember the era of games where patches were rare and small, unlike the current experience of having to wait for Steam to install updates almost every day, and only then will allow me to see if the game I want to play and which worked yesterday now has a mandatory update that I also have to wait for (which is less often but still often enough to be annoying).
Even with MacOS, while I absolutely do appreciate all the behind the scenes stuff regarding security and so on, the last time I appreciated what they did with the UI in an update, the version branding scheme was still to name releases after cats.
Even as an iOS developer, although I can see what they're trying to do with SwiftUI, I find it worse than UIKit in basically every regard because the "magic" keeps not working and the "problem" it tried to solve was never (for me) a problem; with concurrency, they went from GCD to Combine which IMO was a step back, before going to async/await.
"Too many features" is also a problem for the developers, as it leads to them duplicating work. For example, the background sounds feature on my phone and the one on my HomePod each has its own list of sounds, they're not just two interfaces to the same underlying app even though the HomePod's OS is a fork of tvOS which is a fork of iOS.
(The other way around, the home I grew up in is now about twice the size it was when my parents bought it around 1970, judging from the Google areal view).
Unfortunately when the software is done, the product lifetime comes to a close soon after. Everything around the product changes and the software needs to change to keep up. Smart lightbulbs need apps to keep working and you get kicked out of app stores if you don't keep up with never-ending churn Apple and Google imposes on you.
The only way to run older games is to use emulators and other 3rd party effort, that also needs to be continually updated. When you claim that any piece of software is done and completed, you've only externalized the effort required to keep it useful.
I absolutely agree with your pushback against feature creep. That is unfortunately a reflection of internal corporation value system, while the successful open source projects often know where to draw the line.
How does that make it different? More features could always be added to most buildings. You could keep adding rooms onto the side, update the floors/ceilings/walls every year to stay trendy, add a water feature, expand the basement with a tunnel network, etc.
I think a better analogy than building construction is cars. You need to do active maintenance and fix things on cars to keep them running, you may even change out a radio or wheels, etc. like minor feature development, but you're not likely to change out the design of the engine and transmission. You definitely don't need the design crew from the car manufacturer around, aka Product Mgmt, to do maintenance but you do need some semblance of a tech team or people that can do the tech work on contract.
At some point a tech product is "finished" as in a mature, stable product and adding new things to it isn't going to do 10x in revenue. Its probably really hard for the product and tech teams involved to admit though.
I'd suggest commercial aircraft as an even better analogy than cars.
Most of the ongoing costs you mention for cars still apply--but there are also the occasional (possibly dramatic) changes to the interior 'cabin product' like new seats and entertainment systems, new fabrics/branding, new business class seats/pods, changes in seat layouts, etc in order to remain competitive in their market segment.
Cars rarely have such significant refreshes, but software products often have analogous design and UX overhauls that are also intended to try to keep the software competitive in its market segment. And again airlines don't need to engage the specific airframe manufacturer like Boeing or Airbus for these, but they do need some semblance of a tech team that have certain domain expertise in aircraft engineering constraints.
Airframes also have major overhauls called MROs (Maintenance, Repair, and Overhaul) about every 6-10 years, which again does not require the original manufacturer but does require significant engineering expertise. To me this is akin to certain ongoing software maintenance activities like updating a codebase to use newer library versions, major database version updates, API or SDK version compatibility, etc.
> Builders and electricians and tradesmen either work as contractors and take that into account
okay. Salaries office workers don't work on contracts. If they do, they know an end is in sight and renewal is not guaranteed. If companies want contractors, they should just do that.
Meanwhie, I'm sure your parents' generation for many industries expected to find one job and make a career around that company, maybe doing 1 or 2 hops based on circumstances. It was highly unusual to lay off everyone at the drop of a hat. This is not normal, and I don't think we should normalize it.
To use your metaphor, this is more like you are working on the 3rd room of some house and suddenly you are kicked out. Contractors take this into account, but you as a salaried worker just need to bite the bullet. This is companies having their cake and eating it to.
>the old situation was never sustainable to begin with.
plenty of software business rely on contractors dont they? im sure even pre-acquisition vimeo likely used contractors on many roles some even in "engineering" roles.
the idea that software is never done is a double edge sword: yes, its great to have a long term vision that keeps evolving and motivating people to continue to push boundaries. but it also creates this idea that "done" state is not possible or even desirable.
plenty of human (economic) activity is just operating, or maintaining. maybe some people who built products are happy to continue operating and operating it. not everyone, and certainly it would be hard to expecy society to guarantee employment under any circunstances.
i have never seen labor laws that prohibits lay off under any circunstances. some make it more onerous and/or more beneficial conditiona to employees than others. but certainly is it possible (and likely) that vimeo lay offs have been lawfull and even beneficial for many employees. i certainly know plenty of people who explicitly stick around "mature" organizations waiting for the fat check of layoff
It’s a mystery to me, almost every product on market has serious user-facing issues that never get fixed. As if every company indeed have no development team, while all of them retain teams of developers.
Vista Equity operates along a similar model for SAAS
cut wasteful spending, find a way to increase revenue - milk the SAAS for a few years - then either sell it off or shut it down - or it can keep running as a lean cash generating machine
Vista Equity rotates operators within its holding companies
I've been through a Vista Equity acquisition. It was not pretty -- they slashed, consolidated and basically ran their one-size-fits-all playbook. The brought in their crew -- which is totally expected -- and then bought other companies in the same vertical. Of course, they all had different tech stacks.
(like ya said, operators is the right word. it felt icky)
At least for the first year, the acquired teams were able to run more or less the same but with new hyped-up-overly-aggressive Vista hotshot managers and then the sh*t-from-above just started raining down.
Also, they hired the worst sw architect / person I've ever had to work with. He wasted so much time and money.
This is the same business model that Computer Associates used successfully in the 1990s, so it's not new to IT or technology.
The primary difference now is that the transition from bespoke IT on premises environments has been subsumed by the cloud hyperscalars and an entire hierarchy of products that use that infrastructure in a higher level of composability than in the past.
Products like SAP will continue to require engineering to maintain compatibility with the changes in its customers' requirements.
Products like MS-Word don't need that same level of feature work.
If a product is essentially feature complete then making the engineering a "maintenance only" support is about minimizing those support costs.
Sure, but that's not a problem for the short term, and these guys can beef up support to keep it going if needed, just not invest in new features or chasing competitors.
Just like an old building, their business model is to sweat the asset until it's no longer viable. In the meantime, the cashflow goes directly to the bottom line.
Exactly why I charge $999/hour for my software consulting. To the doubters, laugh all you want, but I've been doing this for literal decades, and will absolutely slaughter LLM generated code in terms of code reliability and maintainability amortized over 5 years.
Won't be giving exact figures but that's my business model as well - I charge a premium because my job for clients is to make myself obsolete. If I "deliver" something that needs my constant presence then I haven't actually delivered. Of course, my price is high upfront because I'm budgeting in the fact that I strive to be out of there as soon as feasible instead of trying to stick around.
Some clients are ok with it, some don't; this is normal and what a competitive market should look like. I tell clients openly when my premium service is not the right fit for their current requirements or budget, and there are cases where cheaper labor or LLMs are absolutely a better fit (and they should come back once when/if they outgrow the cheaper, lower-quality product).
I'd love to do this and have a quite marketable resume, but it is extremely, extremely, unclear to me how you build a clientele or where you'd even start.
Only road I can imagine is highly specialized industry, with money, that often has time-sensitive needs, and smart management that knows how to recognize value or trusts their tech management. And even then I think you'd have to start in the coal-mines version of it, $50K/year flat salary, and building a reputation without management taking credit for your successes, somehow.
Once you have them on the phone, you can not only better understand their problem but also demonstrate your skill and credibility in a way no resume or branding could.
At that point it's just a sales game - generally you'd avoid hourly rates and sell them a solution (see my other comment) which will maximize your effective hourly rate while being structured in a way that's very good value for the client. Hourly should be a last resort, at which point generally you'd rather have the client bounce, so you quote a high rate.
I'll offer a specific solution that takes me a week of full time work (14 hours each day -- I'm focused) for about $10k, which is roughly $150/hour if you want to calculate it that way, or another specific solution that takes me 3 weeks of 10 hour days for $15k which amounts to $100/hour. And like any good consultant, I'll eat the cost if I'm wrong. Other times I'll charge $40k when I know it will take a few months of dedicated work and I have to really lock in.
In practice, I never actually charge hourly. So the $999/hour is really Schrodinger's rate.
Hourly rates are inherently risky for clients - you're asking them to part with money with no guaranteed outcome, so there's a natural ceiling where the financial risk becomes untenable regardless of your expertise and reputation.
Clients don't buy hours though, they buy solutions. They have problems costing them money or preventing revenue and they'll pay a percentage of that value to solve it. When you price based on solution value rather than time, your effective hourly rate merely becomes a function of your efficiency and expertise delivering said solution.
They key to achieving such a rate comes down to your sales and business skills: understanding what to sell, how to structure it to maximize your earnings and make it palatable for the client.
For example I generally avoid hourly billing except as a filter for time-wasters. Instead, consultancy becomes a loss leader for the real business: deeply understanding client problems and delivering high-value solutions. Clients happily pay premium rates when they see the price as a fraction of the solution's worth to them.
I only resort to quoting (quite high) hourly rates where it's clear the client just wants consultancy/advice (basically a glorified IT/business support) as a way to make it worth my time and gently encouraging them to bounce (I openly suggest more cost-effective options and refer them there).
You judge how valuable the solution is to your customer and then structure your pricing to maximize your profits while still being palatable to your client.
Let's say your client has a problem that will bring them 1k/hr of revenue when fixed. You think you can fix it in an hour.
You could quote them 5k/hour, because you think you can fix it in one hour and you estimate it'll take them at least 5 hours to find and talk to someone else who could fix it. This is a big gamble for the client, what if you don't fix it or take longer? The client balks.
Now let's say you offer a "reasonable" hourly rate like 150/hr. Your client is happy to take the gamble because 150 is peanuts compared to the value they get if you do fix it. Client takes the deal, you fix the problem, but you got paid peanuts.
Now let's say you offer them a no-fix-no-fee rate of 5k. The client is happy to take it because once the problem is solved it takes them just 5 hours to go back in profit, and they risk nothing if you end up not solving the problem. They take the deal, you fix it in an hour, the client happily pays you 5k, netting an hourly rate of 5k/hour.
Same hourly rate as the first scenario, yet the first scenario will cause everyone to balk while the second one is a steal for the client (in reality, you can actually charge more than 5k, how much more depends on your reputation and sales skills).
Such consultancies feel like a dying art for the new work force. To consult, you need to be trusted. To be trusted, you need to already have experience working with software at scale. To get that experience you need to go through events like mass layoffs every few years, which limits your expertiese built.
I very much worry for Gen Z. Through no fault of their own.
And if no one takes your price, you fail as a business. I think that's the concern. There's not a lot of vectors I feel I can jump in to say "I'll do this for 1000/hr" without getting some bulging eyes. Because I don't have the credibility to back that up.
How to get credibilty? Well, you gotta be in industry. The thing the two consultants here are besmirching. You can't win.
I think you're just looking at these negotiations from the wrong perspective.
> There's not a lot of vectors I feel I can jump in to say "I'll do this for 1000/hr" without getting some bulging eyes.
1000/hr might be a lot for you, for many businesses it's not even a meaningful expense, the bigger hassle for them is doing the paperwork to get the money sent out.
I'm well out of tech at this point, running a small lifestyle business in a different industry. At least once a month, I get people in my new industry offering me significant amounts of money to build them software. I don't have a fancy public tech resume; really, the only thing these people know is that I'm some relatively pleasant, rich, former tech guy.
If you're someone like Steve Jobs then #3 is a bit optional because #4 is increased, both in truth and in arrogant overestimation.
The hardest part of this really is #4, because most people either get too cocky and overconfident in the value they provide in general, or they are so overcome with imposter syndrome that they believe they offer practically nothing, so they do almost entirely open source work and fail to start a consultancy.
> And if no one takes your price, you fail as a business.
Vimeo employees and all the people part of the recent tech bloodbath experienced that too, but without even pocketing the upside beforehand. I'd argue that for anyone currently searching for a job, they will get a better ROI engaging in sales instead.
Any monkey can (and does) sling ChatGPT'd resumes at anything that moves, hoping to get the job and pocket enough salary before people catch on. That scam doesn't work with consultancy on a "paid on delivery" model, so the market there is much less crowded. There are different scams out there but those primarily target big companies.
> There's not a lot of vectors I feel I can jump in to say "I'll do this for 1000/hr"
We as techies know how the sausage is made and estimate a "fair" price based on the effort it would take us to do it. A car mechanic would probably also consider retail oil change prices to be unfair... because he's already invested in the knowledge and tooling and with those it's indeed a 5 min job.
From a business' perspective though, our work might as well be magic - we are writing prayers in an arcane language to make silicon come to life and do things that generate money for the business. It's magic that they have repeatedly failed to replicate for themselves. The latest fad is AI/LLMs and that will fail too - LLMs only work in the hands of a skilled operator - and otherwise fail disastrously and often generate extra remediation work on short notice.
If you worked in tech there's a good chance your past contributions are netting way more than 1k/hour to someone else already - so you can generate this value. The challenge now is to capture more of said value.
Nobody in their right mind will pay 10x market rate for no guarantee of result; see my other comments in this thread. This would open them up to the same scams that happen with permanent employees and third-world countries will be all over it the next day.
But if they are guaranteed a result then the calculus changes, they are no longer thinking of hourly rates but instead of as a fraction of the revenue enabled by your solution, and their risk is lowered to only the opportunity cost. This is a much better deal for the client. Your resulting hourly rate now purely depends on the value of the solution to the client divided by how quickly you can do the task.
You only explicitly quote the 10x market rate when you want the client to bounce because the job or client sounds like a nightmare. You will get some clients who are cheap and insist on an hourly rate to explicitly prevent you from playing the above game and earning the (much bigger) cut of the solution. The "fuck you" rate is for that, it's not expected to be taken, it's there to set a baseline price for your expertise and make the deals you offer sound more attractive in comparison.
It's basically all sales and reframing your work from salaried/hourly rate to how much your work is worth for potential clients (which doesn't scale linearly with time invested nor software complexity).
As to why am I giving you advice on how to compete with me? Because you're already competing with me by willing to settle for permanent employment market rate for the services I am offering. Encouraging you to charge more helps us both.
Have you tried Claude Opus 4.5 within Claude Code?
it's only been released for two months but its changed the calculus entirely
if its been over two months since you've tried any LLM generated code solution, or are still occasionally copy pasting code requirements into a browser chat session as if its still 2023, then I can't put any weight into the opinion
That's because it's been true for every major new model release since GPT-3.
HN is full of people who tried the free version of ChatGPT a couple of years ago, got a load of random hallucinated slop, and concluded it was all a bunch of useless hype. They enjoy parroting a lot of obsolete stuff they read once about stochastic parrots, without the slightest sense of irony.
When I was growing up, my old man recalled engineers who reacted the same way to transistors, which sucked even more than early-generation LLMs when they first came out. Most of them got over vacuum tubes eventually, though. So will most of the HN'ers, likely including you.
I don't know whose thoughts you're trying to attribute to me, but I've been pretty up-to-date myself (while still keeping myself to a $20/month budget that I switch between providers every few months).
Every generation has at best been a 5% improvement, and nothing revolutionary compared to the last generation. Absolutely no significant improvements between me selecting say Claude 3.7 Sonnet, Claude Sonnet 4, or Claude Sonnet 4.5. Still the same somewhat useful tool for specific purposes, still not good enough to be let loose on production, still not better than what I can do myself with 10 or so years of experience.
Genuinely useful from time to time? Sure, I agree completely. Anywhere near being revolutionary enough as people here insist on gaslighting themselves to be? Absolutely not. Not even remotely.
I'll grant that progress in coding hasn't been as impressive, although if you don't see a difference between Claude 3.7 Sonnet and 4.5 Opus (which is the actual SotA for Claude) I'd suspect a skill issue. I haven't seen miraculous progress in baseline code generation, but there has been a lot of progress in tool use. I can tell Claude CLI to install a complex package, for instance, and it will handle all the Python versioning and dependency-hell issues for me, then test and evaluate the results. 3.7 Sonnet couldn't do that, at least not reliably.
What's really different now is that LLMs have become useful research tools. Three or four years ago, models couldn't cite their sources at all. Two or three years ago, they started to gain the capability, but a large proportion of the citations would either be hallucinated or irrelevant. About a year ago, significant improvements started to emerge. At this point, I can give Gemini 3 Pro or GPT 5.2 Pro a multilayered research task, and end up with a report indistinguishable in accuracy and bibliographic quality from what a good human might produce in a couple of weeks.
It might take a half hour to get the answer, and I'm not sure if you could get the same result at the $20/month level, but the hype and promises we started hearing a couple of years ago are starting to bear fruit. The research models are now capable of performing at grad-student level. Not all the time, and not without making stuff up on occasion... but to argue that no progress at all has been made is nothing more or less than moon-landing denial.
Cool, how much of it can I use with a $20/month subscription? I'd reach the monthly limit within hours while gaining nothing. It's not that I never tried it, it's that I did and the difference is nowhere near worth 10x my money (nor even the wait time needed to get results).
> I'd suspect a skill issue.
There's 0 skill involved with asking a magic 8 ball to solve your problem for you. There's some skill involved with making it better for yourself consistently by cramming as much useful info as possible into the context window by writing very specific custom agents / skills / MCP servers / whatever, but I have yet to find a client that would pay me to spend an ungodly amount of time fucking around with my toolbelt instead of delivering results.
> Three or four years ago, models couldn't cite their sources at all. Two or three years ago, they started to gain the capability, but a large proportion of the citations would either be hallucinated or irrelevant. About a year ago, significant improvements started to emerge.
Let's translate that: You don't understand what they're doing under the hood when they "do that", you don't understand where that "improvement" is coming from, and I'm not interested in spending my time teaching you for free. For as little as €50/h, I'd be happy to! contact at my username.
> but the hype and promises we started hearing a couple of years ago are starting to bear fruit.
You're gaslighting yourself again in order to justify the price you're currently paying. Downgrade yourself back to $20 subscription, stick to it for one whole month, learn its limits properly, and then if you feel like you need to upgrade to a higher tier again, do so! Spoiler alert: it's gonna appear "significantly crappier" for about a week, and then after that week, you will get used to it and realise you've wasted a fuck ton of money on nothing.
> but to argue that no progress at all has been made is nothing more or less than moon-landing denial.
Where's that coming from? You're putting words into my mouth again. I specifically acknowledged small improvements, but I dismissed drastic improvements. Zero of what you said convinced me otherwise. For the love of all holy, use your own brain a little bit to actually understand the tools you're advocating for. Saying that you drank too much Kool-Aid would've been a severe understatement.
> but I have yet to find a client that would pay me to spend an ungodly amount of time fucking around with my toolbelt instead of delivering results.
right, yeah, I got started by being able to expense the $200 plan, and now I don't expense it but there's no going back, mostly because this is extremely undervalued and its unclear how long this deal will be around
Claude's $200/mo Max x20 plan is the best deal in the game, its equivalent to about $2600 worth of API credits, and is 4x more ability than the $100 plan (Max x5)
all roads to not really... caring... about why you're resistant to this. it's going to be too late when Anthropic raises the prices, all the reasons behind your reservations grow, unless someone else undercuts them just as well.
This is so true, and it's been genuinely painful for me to realize how fucking lazy and close-minded many in our industry actually are when you get down to it.
I understand your argument. But I have worked at two companies that worked pretty much like you described. They call it 'project-oriented'. They threw lots of engineers at projects, hired freelancers, and got it working as fast as possible. Once it was done, they only left a maintainer or two.
That model works fine for a few years. Then you need a bigger change. Often, the system is built on top of some enterprise project, heavily customized, and you stay at your outdated version until it becomes unsupported. The maintainers don't care, and often don't have the capability to upgrade, so they just leave it as long as it keeps working. Or maybe some law has been introduced and requires a bigger change. Or the market just changes, and you need to support new APIs, new payment methods, new integrations...
The maintainers tend to quit every 1-2 years and are replaced with someone only trained by the previous generation. With every generation, the maintainers get worse. After 3 generations, all product knowledge is gone. To make things worse, the maintainers do stupid things in the code because they don't fully understand it, and it begins to rot. In the worst case I know, no one even knew what branch was deployed on production and what the last changes were.
Then, after 5-10 years of decay, some requirement comes along that would require a major refactoring. Everybody is overwhelmed, no one understands the internals, and eventually they decide that it the project is now so outdated that the only solution is to replace it. Management doesn't care because they can blame their predecessors.
In my experience, that's how it always works. I know at least 5 major projects that took over a year to develop, and costing millions, in at least one case tens of millions, that died like that.
The fact that it's the norm for the builders of mature software to stick around can lead to some gross engineering inefficiencies. For instance, a lot of Evernote's backend infrastructure was manually managed [0]:
With Evernote, Bending Spoons identified that the backend needed a complete rewrite. They moved from a monolithic architecture running on manually provisioned virtual machines to a microservices architecture with managed databases, significantly improving performance and scalability.
It's easy for companies to fall into such pits of inefficiency because climbing out of those pits entails utterly gutting the headcount [*].
I wonder if the same is true at Vimeo, which employed ~250 engineers [1], which seems high for a mature product that's deliberately conservative (most of Vimeo's customers are B2B whitelabelers, for whom a constantly changing product is a massive downside.) It's not like video codecs or storage systems or web standards are changing daily. I would imagine a well-engineered codebase from 10 years ago would work well today with only minimal changes, mostly centered around updating libraries for security patches. The fact that they had 250 engineers on staff who presumably did more than play ping-pong all day makes me wonder if the codebase was not, in fact, well-engineered.
[*] Imagine the equivalent for a building: "we don't have automatic circuit breakers in this building; instead, we have a 24 hour staff of electricians who measure current with an ammeter and manually cut the power if it gets too high."
> With Evernote, Bending Spoons identified that the backend needed a complete rewrite. They moved from a monolithic architecture running on manually provisioned virtual machines to a microservices architecture with managed databases, significantly improving performance and scalability.
And accidentally turned it into a shitty product in the process :-)
Well, the goal of the optimizations wasn't to benefit the customer or even make the app faster. It was to make it easier for a skeleton crew to maintain. If that chopped out a few features, oh well.
Car makers don't make a car and dismiss the entire engineering team.
Sure, you could do that, but eventually people are going to move on from your only car that's old and clunky.
That's exactly Bending Spoons model. Cut all the expenses, let the product die slowly. In the meantime you might have made more money than you put in to buy the product and the team.
I put it to not-tech people as: "[insert_ridiculous_valuation] is because you can fire everyone tomorrow and keep operating"
> "Tech was an outlier in this case because ZIRP allowed companies to retain full engineering teams to keep "engineering" the product despite it being essentially finished."
This is wrong, though, it's unnecessarily tying in a pop-finance obsession with ZIRP.
Unnecessary is the right word because it's not necessary for the rest of your post, you could cut it out and it wouldn't affect your argument or anyone's understanding.
Wrong is the right word because the dynamics it assumes are fantastical - companies took on debt to fund bloated engineering teams because no one noticed the engineering was done?
Additionally, ZIRP didn't induce this, this stuff happened, exactly the same, during ZIRP as well. Saw it in the iPad point of sale industry in early to mid 2010s.
A real finance nerd would point out ZIRP would in fact induce more of this behavior. It makes it cheaper for private equity/entities like Bending Spoons to take on debt to buy out companies and strip mine them. (strip mine being my word for this behavior)
> companies took on debt to fund bloated engineering teams because no one noticed the engineering was done
ZIRP allowed a lot of "businesses" to exist that wouldn't in a conventional, competitive capitalistic environment. Businesses in quotes because there was never any reasonable potential for profitability, but it didn't matter because VC money was cheap. Building a sustainable business is hard, playing "startup founder" and having that lifestyle subsidized by VCs is easier.
In that case, (over)engineering was part of the performance art that was required to keep your only revenue source: the next funding round. There was never any incentive to "finish" the product because doing that would put your business model (or lack thereof) to the test and stop the music. On the other hand, as long as cheap money is around you could endlessly "engineer" and pivot and bullshit around, chasing the next funding round and using that to pay yourself/your friends decent salaries.
During the ZIRP era it was all about "engagement" and DAUs/MAUs, then it was blockchain, and now it's all about AI. For those that have run out of grifts, they fold or "incredible journey" and get sold for pennies on the dollar to entities like Bending Spoons that do notice there are bloated engineering teams that can be cut.
You hold ZIRP caused this, then cite crypto and AI as continuations, both post-ZIRP. Which is it?
> as long as cheap money is around you could endlessly "engineer" and pivot and bullshit around
I lived this in a particular industry firmly inside the ZIRP era. It doesn't begin to describe how things actually worked. Even if ZIRP is synonymous with endless money to you, on their end, they still had to choose how to allocate it, and it was finite. You're not going to a bank for a loan, you beg people with experience in software to believe you're trending up.
> During the ZIRP era it was all about "engagement" and DAUs/MAUs, then it was blockchain, and now it's all about AI.
Do you genuinely believe DAUs/MAUs stopped mattering once crpyto, then AI, arrived?
Your argument requires believing that engineers collectively ran a con that no investor, board member, or executive noticed for a decade, and the only people who figured it out were PE firms after 2022. That's conspiracy theory dressed in finance vocabulary.
The leveraged buyout model you're praising as "normal capitalism" is itself subsidized by cheap debt. You've correctly identified that cheap money distorts incentives. You've just misidentified which side of the transaction is the distortion.
ZIRP was the era of where any tech startup was seen as a good investment no matter how stupid. Take any stupid business that doesn't work, say you do it with tech, get millions thrown at you. Then it was blockchain - same story, conventional business that doesn't work, but with blockchain - boom, instant money. Now the same with AI.
> you beg people with experience in software to believe you're trending up
Considering how much stupid shit I've seen funded (that quietly "incredible journey'd" away or folded by now) I don't think much begging was involved. Capital was desperate to find a place, no matter how ill-advised. Everyone in the startup food chain enjoyed it.
> Do you genuinely believe DAUs/MAUs stopped mattering once crpyto, then AI, arrived?
What started mattering is a clear path to monetize said DAUs/MAUs. You can't just show up with (potentially flawed) analytics saying you have DAUs and you're gonna figure out monetization later. Now you need to actually figure it out now and show up with analytics + proof of actually monetizing those users. Well, except if you're selling AI - then it's ok to sell inference at a major loss and figure out monetization later.
> collectively ran a con that no investor, board member, or executive noticed for a decade
"Investing" in a Ponzi can still be profitable as long as you get out before it collapses. There was a lot of passing around the hot potatoes between VCs too, so a VC can rightfully determine something to be a scam, but still invest if they believe SoftBank will happily hold the bag (and those guys ended up taking a lot of bags).
> "except if you're selling AI - then it's ok to sell inference at a major loss and figure out monetization later"
So the dynamic you attributed to ZIRP is alive and well, just wearing different clothes. Your original framework was "ZIRP allowed this, now real capitalism is correcting it." Now it's "this is permanent, it just rotates themes." These are different arguments.
> "Investing in a Ponzi can still be profitable as long as you get out before it collapses... a VC can rightfully determine something to be a scam, but still invest"
You've just moved the con from engineers to VCs. If investors knowingly played hot potato, then engineers weren't running a grift, they were employees doing jobs while capital played musical chairs above their heads.
So which is it: were engineers "deadweight" padding out finished products, or were they ordinary workers caught in a game VCs were knowingly playing? Because "VCs knew it was a scam but invested anyway" is a very different story than "engineers tricked everyone into thinking the product wasn't finished."
You're retreating into "everyone knew it was fake."
I'm making the argument that past bubbles like ZIRP, blockchain and now AI have given many engineers the illusion that "engineering" the same product forever is a sustainable endeavor.
Turns out that's not the case and with each bubble popping more and more people get a rude awakening. Some are able to jump on another bubble and keep the gravy train going, but might be left in the dust in the next one and so on.
If anyone was conned, it's primarily the younger engineers who started their career in those bubbles, were never exposed to the financial realities or even forced to think about it, and now get a very unpleasant wake up call.
You may disagree with my argument - but in that case I suggest taking a short position on Bending Spoons & their competitors who appear to be making the same argument and putting their money where their mouth is.
You started by calling engineers "deadweight" that Bending Spoons correctly cuts. Now they're victims who were "conned" and given "illusions" and deserve sympathy for their "unpleasant wake up call."
These are incompatible framings. Deadweight is culpable. Victims of a con aren't. Which is it?
> I suggest taking a short position on Bending Spoons
Strip-mining is often profitable. That's not the disagreement. The disagreement is whether "profitable" validates your original framing that the workers being cut are deadweight rather than, by your new admission, ordinary people who were lied to by the actual decision-makers.
Note also the lack of understanding of finance, coupled to parroting pop-finance, continues. You're trying valiantly to hammer phrases we all know, into meanings they don't have. They sound epic, and are very "law of nature" feeling. I understand the appeal. Anyways, you cannot short a company without a stock.
I guess that was poor framing on my part from the beginning; I used the term deadweight meaning overhead that can be cut, not implying culpability one way or another.
Which positions are culpable or victims is besides the point here (I have other comments on ZIRP related threads if you are interested, where I do make direct accusations).
> ordinary people who were lied to by the actual decision-makers
Were they truly lied to? They got paid for years of service. Now whether they got lied to by Bending Spoons denying there will be layoffs I don't know (or whether the lie matters - for all we know they got a fair severance package, at least in places where that is legally mandated?).
But for those who started their career in the "good days", I would say they got misled by an environment that rewarded raw engineering without concern for the business outcome of said engineering (and often rewarded over engineering in fundamentally unsustainable businesses). Now the business outcome is suddenly becoming the most important thing and these people are taken by surprise.
---
Now it's clear you have some kind of beef with me; I'm either talking complete shit, or I struck a nerve. Maybe a bit of both. Either way I will not pursue this conversation further - best of luck!
I don't have some kind of beef with you. I react personally too in these long discussions, don't begrudge you the impression.
Just saw what I thought was youth, but it was a fellow older fellow*, so chased the interlocution more than I usually would because I was curious and wanted to make sure there wasn't insight I had missed and you were speaking loosely (as is normal, we are not robots)
re: motivation, I took a lot of pride in not taking money back in prime ZIRP, early-mid 2010s and felt it was vindicated by what I saw happen to competitors.
What I saw was proto-"Bending Spoons" behavior. Frankly, Bending Spoons seems ethical and right-headed at its face. i.e. after 30 seconds with their website. but what do I know.
What I saw was private equity rollup iPad-based point of sale software who couldn't justify another round, and let the business owners using their point of sale systems flounder until they got the energy to switch. Explicitly. the rug pull wasn't just on engineering or further development of the system, it was support too. That might sound stupid (who needs support w/software?), but its necessary for point of sale due to credit card processing. Multiple companies, same playbook.
Cheers & apologies, I went too far, I left you feeling like it was a grudge.
FWIW it's also important to me because I want a fellow wide-eyed college-dropout-waiter soaking in HN from a small town to know VCs involved in these messes will continue acting as they have post ZIRP, as you've established.
* via your HN profile, not stalking off site or based on username
No worries, all good! It's difficult to convey emotions and tone online.
> it was a fellow older fellow
~11 years professional experience only - still got plenty to learn, but unfortunately seen enough shit to be cynical. Started out starry-eyed in the middle of the ZIRP era ~2015 and made some salary off it but no exit money, though something felt off and I never understood the over-engineering at the time.
Then as I gained experience, switched to consulting to boost my earnings and looking back at it my (admittedly very jaded) opinion is that a lot of that "engineering" was performative bullshit enabled by cheap money, which continues to be the case in some verticals (blockchain; now AI).
Senior engineers of the time would've likely known it was bullshit and were just happy to play with new tech while subsidized by VCs, but unfortunately this "quiet part" was never said out loud to those who started their careers during this period and for whom their only experience of technology was through this distorted lens of cheap money and no financial/business pressures.
The result is a lot of very senior people tech-wise but with little exposure to the business side of their craft, who the readjustment hit like a brick wall. The fact my statement about maintaining a (well-built) product requiring much less manpower than building it is apparently controversial suggests many people have yet to experience this brick wall.
But for those who looked into the financials, the selling out and subsequent layoffs should've come at no surprise - it was never sustainable to keep paying those tech salaries perpetually. The same thing happened to blockchain/web3/crypto, and the same will eventually happen to AI.
There is still and will always be money to be made in technology, but it will be made by applying technology to business problems and approaching every problem as "how much money does this make/save and how big of a cut I can negotiate". Permanent employment is just letting someone else do said negotiation on your behalf in exchange for a promise of stability - well, turns out when the times are tough they don't have to keep that promise: plan accordingly.
(btw, this ZIRP-era distortion was not limited to technical roles - there were plenty of "startup founders" and executive roles too who got there because of the cheap money rather than earning said position through demonstrated skill - unsurprisingly, a lot of those people have since quietly transitioned back to the rank & file once the money fueling their little startup escapade ran out)
If you build a house you don't keep the builders on payroll once it's built to keep "building" it - you may need maintenance staff but that's it
A very analytical, technological, short-sighted view of things. But not necessarily how the customers think.
For many customers, a company that isn't growing is shrinking. If a company isn't willing to invest in growth, that's a red flag.
I mentioned the Vimeo thing in a meeting this morning, and the head of Communications immediately said he's going to start looking for alternatives.
You can make all the analogies and excuses you like, but look at Vimeo's sister properties (Evernote, etc.) Are they better off since they were gutted? Are they delivering more value to the customers, or just funneling money to the parent company and its investors?
I think a better analogy is some big Wall Street investment company buying up nursing homes, and making lots of noises about "efficiency." That never works out well for the patients/customers. Only for the company.
> the head of Communications immediately said he's going to start looking for alternatives.
He's gonna start looking for alternatives and then most likely find nothing that matches the featureset vs price of the current solution + the cost of switching, and the matter will quickly disappear.
Last time AWS or Cloudflare was down a lot of noise was made and a lot of people started looking for alternatives too - and everyone forgot about it a week later.
> Only for the company.
Yes, the point of business is to make profit, not to be a charity. Bending Spoons believes they can extract enough profit off Vimeo to justify the purchase price, either by reducing expenses, raising prices or both. This may still be palatable to the customers if they don't have any better option.
Yes, the point of business is to make profit, not to be a charity.
No one said it was. Where do you see that in this thread?
Bending Spoons believes they can extract enough profit off Vimeo to justify the purchase price, either by reducing expenses, raising prices or both. This may still be palatable to the customers if they don't have any better option.
Just listen to yourself. "Extract enough profit," "raising prices," and ending with You don't like it, too bad. You sound like the taxi industry before Uber.
This the type of thinking that gave us Windows 11, Adobe, and every other piece of technology that started good, but became crap.
It's also the reason new companies suddenly show up and eat the incumbent's lunch. Happens every day.
I'm glad I don't work for you or your company. I have pride in my work. I wouldn't want to be just another tool to "extract" things from my customers because "they don't have any better option."
Fair enough, a minority of businesses are run as public benefit corporations. But the vast majority is ran to generate profit. Bending Spoons especially.
> I wouldn't want to be just another tool to "extract" things from my customers
I assume you're independently wealthy and acquired said wealth from a generous donor who gave it to you with no expectations in return?
Because otherwise we're all "extracting" something.
I take pride in my work too and I believe the prices I charge for my services are fair - but nevertheless if I gave the choice to my clients between paying me for those services or getting them for free, they'd prefer free.
> This the type of thinking that gave us Windows 11
What's giving us enshittification and the terrible quality of software nowadays is the lack of healthy competition, because of lacking anti-trust enforcement and adversarial interoperability being effectively illegal. Companies thus take their customers hostage and raise prices/decrease quality.
Ideally we'd just make competition in tech a reality again which would put a limit on enshittification.
I'd question why your "head of Communications" isn't already aware of alternative vendors for important pieces of their domain. After all, companies go out of business, get bought out, change pricing all the time. And Vimeo was bought out months ago - this person didn't start researching then, just in case? I'd suggest the CEO start "looking for alternatives" for this employee.
I'd question why your "head of Communications" isn't already aware of alternative vendors for important pieces of their domain.
I don't like the guy, so it's not like me to defend him, but perhaps because he's busy being the head of the Communications department, instead of a tech nerd?
My company produces thousands of pieces of communication each year in many different forms. Video is a small part of what his department does, so you make the false assumption that this is an "important piece" of his domain.
I wouldn't be surprised to learn he doesn't have some internal cronjob to constantly search for alternatives to every single one of the (probably hundreds) of vendors we have around the world.
It's very weird that you feel that you're in a position to second-guess a person you never met, in a job you've never done, in a company you don't know, in an industry you also don't know. That's Olympic-level hubris.
You said: I mentioned the Vimeo thing in a meeting this morning, and the head of Communications immediately said he's going to start looking for alternatives.
And now you're saying he might have a "cronjob" constantly searching for alternatives? Well then your original point is neutered, he's not going to "start" since he's already been looking.
And video is only a small part? Not an "important piece"? Well then why should Vimeo's owners manage their company based upon what low-level users think? Again, you've minimized the point of your original post to irrelevancy.
The biggest piece of evidence for this worldview is the Twitter acquisition. A lot of people were very confident that it would quickly fall over after mass layoffs. That turned out not to be the case: the site can be kept running on a much lower staff.
They've not really been able to add new features to the backend, but on the other hand: old @Jack Dorsey Twitter was so bad about this that there were memes ("likes are now florps"). And the features they have added (indecent image autogeneration) have caused as much brand damage in Europe as the Nazi salute. Yet the site continues to stay up almost all the time.
(I don't think ZIRP is where the blame should lie, though. It's SaaS, which turns software into rentierism rather than purchase)
> “Tech was an outlier in this case because ZIRP allowed companies to retain full engineering teams to keep "engineering" the product even once product-market-fit has been achieved…”
Do you include visual design/UI design in the engineering category? In the situation you describe does a completed product continue evolving visually, or does the design stay fixed, and gets bug fixes and such?
Buildings are built according to a standard, legal code, with architectural drawings, inspections, standard components and dimensions, etc. The people who work on them are trained and certified in specific practices with specific tools and materials, and follow rigid guidelines. Most jobs are the same tools, same parts, same basic construction, same tasks, there are plans available, and most of the time it was inspected so it was done mostly in a way everyone understands and expects. Maintenance is very minimal, on the order of years, and it lasts decades if not centuries.
Software is more like industrial manufacturing. Besides the high cost of the machinery, if the machines stop working (which they do occasionally) you stop producing product, so you need someone on staff who is familiar with them to fix them. A friend of mine is one of several "night staff" at Hershey's that just sit there twiddling their thumbs until a candy machine stops working at 4am.
> you need someone on staff who is familiar with them to fix them
But that maintenance headcount is much lower than the headcount necessary to build that machine. The same should be the case in tech - once the product is built and the groundwork laid, ongoing maintenance and minor alterations should not require anywhere near the headcount it took to build.
I agree you don't need a large software engineering headcount for maintenance. But there's multiple factors that change the estimate:
- You need redundancy in case someone leaves, is hit by a bus, gets sick, wants to go on vacation
- The software is bespoke, so staff need to know the ins and outs of all of it
- The more software to maintain, more knowledge needed, and more maintenance tasks
- Poorly built software/systems need a lot more maintenance
- The business leaders may (erroneously) keep asking for more changes, which creates a greater engineering load
- If the business value is based on technological capability, you will eventually need radical changes to keep up with new tech
Now, in a few cases, you can cheat. Wordpress requires less maintenance if you rely on canned plugins. But security patching is constant, and eventually you have to upgrade the entire thing as old plugins and core version go EOL. Managed instances help a lot here but still break from upstream changes. And as browsers change, so do the frontend software's compatibility.
The more complex software you depend on, the more expertise you need to fix things. If your usage keeps growing, but your app wasn't designed to scale ("just use Postgres" is not a scaling solution; some things even buying more hardware won't fix), now you need someone to bust open walls and add extensions to the building. That's a lot more dangerous with software contractors than the original engineers.
If your entire stack and app is bespoke, and you run your own VMs, or god forbid, run your own metal, it's a much larger maintenance burden (to keep it running well; lots of people limp along for years on broken equipment and software, at high risk to the business)
If we actually did build software more like we build buildings, we could bring in contractors for short stints to do either maintenance or new construction. But the complexity of current software engineering trends makes that fail a lot of the time.
Replying here because GP makes a good distinction, and your point still holds.
I would point out that there are a few alternate models:
1) You use the maintenance headcount to build, and you just build that much slower.
2) You have an org that wants to stay the same size and move from project to project. In that case, some subset of your staff, are, at any one time, revisiting old projects for updates/maintenance, and some other portion are working on building a new thing. This is probably the strongest paradigm, because you can leverage common platforms between solutions.
Unfortunately, of course, either of this is at odds with the current approach to business/capital, in which once an opportunity emerges, everything is thrown at it as quickly as possible.
why do you think the previous management team couldn't pull an Elon and fire 80% of the engineering staff themselves? why they needed an external leadership to take over and do it?
Part that i can't wrap my head around was at least in case of twitter, it was a hostile take over. In case of Vimeo, it didn't look hostile at all.
I wonder if existing management had a lot of social ties to the existing workforce so that they couldn't easily get away doing that themselves without a big hit to their reputation.
Letting someone else do the dirty work allows them to disassociate themselves from the (predictable) outcome and frame it as just business.
I don't think you need ZIRP or even VC to have successful software companies that reinvest in features. You need a low marginal cost of manufacturing, aka the floppy disk.
Yep, and then CDROMs really bumped it up to the next level for Microsoft.
Pop music CD's had been popular for years before data CDROMs became available and more common.
Stars like Michael Jackson were raking in the bucks and their record companies even more.
Then by the mid '90's Windows was too sizable and unwieldy for most people to install from floppy any more, and consumer PCs started having CD reader/players standard.
Microsoft CDs started flying off the shelf at 10x the retail price the record companies were charging for music CD's.
the more appropriate analogy is a car company. They still need engineers because they need to keep coming out with new model and technology in order to remain competitive. Ford didn't fire its engineering team once it had built a car.
> Bending Spoons has a pattern of acquiring companies, then laying off staff and cutting features. For example, Bending Spoons acquired note-taking and task management app Evernote in 2022, after which the company laid off most of its U.S. and Chile staff and moved operations to Europe in 2023. Evernote then shut down the Linux and older legacy versions of the app, and then proceeded to place heavy restrictions on the app’s free tier in 2024.
> In another example, Bending Spoons acquired WeTransfer in July 2024 and then laid off 75% of its staff a few weeks after. A couple months later, WeTransfer began limiting free users to 10 transfers per month.
I don't understand this model. Such significant layoffs would indicate that there is no real appetite for expansion or growth.
Their goal might be be to acquire, dramatically cut costs, and then run the product for as long as they can at a profit before breaking it down and selling it off (or hope for a buyout by a bigger player.) But that wouldn't make sense — customers of a depreciating SaaS product surely churn after a 1-3 years, so they wouldn't make enough of a return from their existing customers to justify the investment...
Yeah this is what I think Bending Spoons does, mostly based on the Evernote situation.
Product has paying users and it's in a "complete" state. Cut costs to optimize profit for a bit and hope not everyone leaves.
In the case of Evernote, it's probably really hard to get 10 year users off of it at this point, so they can double subscriptions and they're locked in. My assumption is that there's a serious amount of people that go "eh" and just deal with the cost increase and stagnated features.
It was like that with WeTransfer too. Fine company that had been profitable for years, but with little hope of getting ever 10x bigger again. I used to work there and had already left by the time of the acquisition, but all the old colleagues I've spoken to said the same.
The main business was throwing off gobs of money and there were SO MANY failed projects to try and find new revenue streams. Everyone who was not being pushed by the PE owners could see that they would never account to even 1% of the revenues of the main product. It was only a matter of time before someone came in, said "the main business is fine as is" and fired the people who were involved in the moonshots then sat back and raked in the cash. Sure, it will probably not last forever. But if it brings in millions per year for 15-20 years until the company dies, then that is probably an outcome Bending Spoons is fine with.
For a hosting space like Vimeo, I'd be surprised if this gave them 5 years. And remember, they acquired Vimeo for over a billion dollars.
This isn't like some B2C 5-10 dollar a month service. Video hosting is notoriously expensive and paying clients will quickly see other alternatives if they see smoke. These are already people with specialized needs that the main market leader (Youtube) cannot fulfill. They are "active", so to speak.
> These are already people with specialized needs that the main market leader (Youtube) cannot fulfill.
Isn't this just a bigger reason why these people won't leave? Assuming the acquirer isn't dumb enough to remove the core benefit that comes from their highest paying customers, they will keep providing those, and those customers won't churn. And I think this is a safe assumption, considering it's the primary goal and focus of the people at the acquirer.
My TLDR response here would be this: Vimeo isn't Evernote and people are paying a lot more to expect more. The nature of this means that smaller bits of "product rot" will push them away faster than what a consumer would tolerate. These are already people who needed to deliberately avoid Youtube, so they aren't afraid to migrate again if needed.
There's also a lot more competition with Vimeo than there is with YouTube. So options exist to find.
----
But I'll break down my thoughts further. I'm familiar with the scene (a lot of artists use Vimeo for their portfolios, as well as working with clients on NDA content), but not intimate. So I'd love someone for me to call me out here. But:
There's 2 lenses here. Your lens implies Vimeo is the best service in this niche space, that reducing down the staff count to a skeleton crew will keep it as the most competitive option, and that as long as this isn't disrupted that it'll be business as usual. And we'll be charitable and assume this doesn't enshittify. Those are all valid points. I'm much less charitable, but I can still work in this lens for the sake of argument.
The lens I'm looking in is more at the type of person using Vimeo, not the type of business Vimeo runs. Compare this to Evernote. It's a lot closer to Twitter or Facebook, where remaining users will use it simply because "it's familiar" more than for any competitive edge. It has everything you need, and even if costs rise, we're still talking about one lunch outing per month. It's a "sticky" product benefiting from previous goodwill and marketing.
The people on Vimeo aren't "sticky". They are closer to the type of person who leaves Windows for Linux because Microsoft keeps pissing then off. In fact it's more like they are Linux users who jump around from distro to distro because they already forsook the market leader. They are "actively" on the move and aware of the tools they use. Given that Vimeo is a highly premium service when you use Enterprise, you need to be active. You don't want to be on a sinking ship and have your work crash with it.
So I see two roads here. Some users will stay "stuck" because maybe nothing else does compared to Vimeo. Or because some larger pipeline relies on Vimeo and it's beyond their control. Then some users will be either leaving to another service, or actively keeping an eye out for competitors in the near future. That's what I see as "different" here.
Now, taking my charitable lens off: I do think there will be a lot of small issues pushing people off, and then a few huge ones. Small things like site performance degrading as they scale back server, and worse support as they slash labor. Then the larger things will truly push people, like a price hike, change in monetization models, or failing to honor any deals made pre-bending spoons. Or even a huge data leak. Those things, big and little, break the foundation of a trusted business.
Since Vimeo owns the customer billing relationship in a lot of their whitelabel B2B business, migration would be a pain, especially when compounded by a massive amount of data needing to be re-ingested. I think those customers will tolerate a reasonable amount of rot before starting to move and that the timescales would be long.
>But I don't really see what overall lessons there are here.
So many chains to keep up with. There wasn't really a lesson here. Just "Vimeo is not Evernote"?
My wider lesson unrelated to this chain is that US at will employnent sucks and we need to overhaul it. You don't create a trusting career by treating employees like toys to discard.
The US has enriched a vastly larger number of software engineers through at will employment that Europe has through making it very hard to fire people who aren't adding value.
1. I don't know how that's relevant to my argument at all. This is just "you criticize society, yet you participate in it" dismissal.
2. This is like saying "Asia has better rice because it employs more rice makers than the US". Besides being dubious in truth, that also isn't a good measurement for "enrichment" nor "quality". It's just saying that there's more money being put into the industry in this country than another counry's industry.
3. Even if I took this as truth, this didnt happen overnight. I worry about how Gen Z will be "enriched" in this model, and saying "but millenials/Gen X had great careers" is condescending to Gen Z at best. The rules changed over their careers, and we're still using the old rules to talk about how good we have it. Or had it. Gen Z doesn't know what those rules are anymore, so there's nothing to fall in love with.
That's fine, but different people have different risk tolerances and preferences. There's many people who would never want to emigrate to the USA, and many Americans who emigrate abroad. There's no one country that fits all personalities.
And honestly this is probably fine. If the main business can't grow and there have been a few years of attempts to produce complementary businesses with no success, that's a good sign that the business should be moved into a "return money to owners" model.
Sadly, "return money to owners" ends more like the owner selling off the company and leaving all the workers under them in freefall. And people wonder why loyalty is dead.
The owner got a big pay package from the sale on top of usually being one of the more highly compensated employees at such companies. What do you mean by "the owner didn't get paid"?
>No one wonders why loyalty is dead.
I see you missed the recent narrative of "Gen Z is lazy" and "most managers avoid hiring Gen Z" out there. I assure you many managers are baffled, bit blame the (relative) children instead of seeing how work culture has shifted since they were that age
Yes, the owners were paid by the sale. The argument by other people was that the sale shouldn't happen, or vice versa that the sale should happen only to people who were committed to continuing to spend the company's money on supporting employees who are stipulated to not be adding much value (and, thus, are not willing to pay much for the company).
Guys, I totally get it. Nobody likes to be laid off. I was laid off a month ago. But the money that is being soaked up by employee who are, again, stipulated to be not doing anything productive goes somewhere else. This may be a tragedy for an individual person, but it's good for society overall.
the owners didn't have shares in their company? they weren't paid for their labor? They only get money when they sell off and are working for free out of a labor of love until then?
>The argument by other people was that the sale shouldn't happen...
I guess it wasn't in this chain, but my argument was focused on the human element. I don't care if the owners got a trillion dollars and never shared. I don't think it's right to be able to lie to your employees only to let them go with no notice a few months later.
You're never going to convince me that "it's good for society" to prop up livliehoods on convinient lies and instability. That's how suddenly everyone starts talking less about Star Trek and more about Luigi.
The founders are probably not the owners of a large majority of the business. Most of the owners are not drawing any salary.
Look, lying is bad sure. It would be better if they had been honest in November. But nobody here is actually arguing that the layoffs are fine, they're only mad about the comms.
If they are founders and they chose to leave, that's their freedom to do so. Just like any employee you don't get a salary for leaving just because you used to work there.
if you're an owner who bought in, you already got your money. You got a steady profit from sitting there and operating a business at best. At worst you made a bad business decision. You're not owed profit.
So yes, they are both paid, or gambled and had a bad opportunity cost. That's life. I don't see it as justification for them to "deserve" their sale, even if it's legally their call.
>But nobody here is actually arguing that the layoffs are fine, they're only mad about the comms.
Many people in this discussion are in fact arguing that the layoffs are fine. to paraphrase a few
> "It's obvious if you know who Bending Spoons is"
> "That's at-will employment, it's fair"
> "they have to run a business"
> "most of the owners are not drawing any salary"
So yes, even if it's against their best interests there are still so many beholden to defend billionaires. And that is why I asset seemingly obvious points. What's your argument here again?
This is correct. You're buying a cashflow. Bending Spoons has optimized their model for very specific types of cashflow enterprises to aggregate into their portfolio.
I use Harvest to track hours and expenses and to invoice my customers. Bending Spoons apparently bought them a while ago and just eliminated the shell company around Harvest.
Based on my experience with Evernote, I don't trust Bending Spoons, and I'm wondering if I should look for a different time-tracking and invoicing system.
I've been in the same boat as you and replaced it last year but still pay for harvest (grandfathered pricing) until I can be sure I don't need it. I'm almost up to renewal and haven't used it at all since trying app.solidtime.io
I'll be honest it's not as good as harvest. The mac app is a bit buggy, it's not as easy to add manual time, and you need to pay for pdf export. But having said that I've found the free version to cover 90% of my use of the paid version of harvest
I use Harvest for my freelance invoicing and started seeing the huge notice at the top of the app and was wondering how this was going to impact my stuff going forward. I'm also very leery having gone through a horrible Evernote experience.
If anybody has any good alternatives, I'm all ears.
It would be nice if there were a common way for essentially feature-complete SaaS businesses to carry on and maintain some expected level of quality, security updates, and support without endless pressure to expand revenue or slash costs.
A lot of the pressure to expand revenue comes from within thanks to the flaws of permanent employment - you hired permanent employees at a discount compared to the equivalent contractor/temporary workforce in exchange for a promise of perpetual employment. These people will thus do their best to ensure their perpetual employment (they will never say "hey I think we've finished building your product, now you can lay us off to make profit").
You can of course sidestep that and use contractors for the initial build out - plenty of agencies and freelancers will give you a quote with various terms. It'll cost way more in the short term because you're essentially paying upfront the years of salary they would otherwise earn building the same thing as permanent employees, but at least it's an upfront, honest transaction with no expectation of loyalty. You can then hire a permanent skeleton crew for the continuous upkeep.
Want a turnkey Vimeo you can deploy on a cloud or truckloads of servers you can just rack up in a colo? If you have a spare 1.4B laying around, I'm sure that can be arranged.
Been a paiyng Evernote customer since its launch. I unsubscribed at the beginning of 2025 after 7/8 years of shitty releases, not fixing old bugs, and new useless features.
I don't user Evernote very often, but I have a bunch of stuff stored in there and use it basically in a read-only mode. For a long time I was able to get the $36 / year plan which I felt pretty good about. It was a great app and service which I didn't use very much, so that felt like a fair price and I felt good about supporting them at that level. Basically every time I opened Evernote, I was paying $2.
But then the price tripled and for me, it's too much. I'll pay $2 per session, but not $5.
I remember their CEO (Phil Libin I think) on their podcast explaining how they were building a 100 year company. I really wanted to believe that.
I use Obsidian now and like it, but it feels like they are going down the same path. They keep adding features that don't really fit the original editor-for-a-folder-of-markdown-files. I wish they would stop.
It's a bummer but the feature treadmill seems inescapable. Bending Spoons will probably be able to buy Obsidian for a very nice price in a few years and the Obsidian founders will do very well.
If everyone gets salaries and equity is paid for then everyone's done great. And then we can build another one, or an open source equivalent once all the money's been spent researching useful features, and then we're done.
It's worse. When a company like this is "mature", they don't try to appeal to new users. They instead squeeze what they can out of the existing user base, because that user base is probably already dying off. This isn't about attaining a steady state business, its about seeing how much of the toothpaste you can still squeeze out the bottle before it crusts up.
This practice is derogatorily called "vulture capitalism" for a reason. I hope the remaining engineers are either lining up for retirement or networking around for their next gig.
> Their goal might be be to acquire, dramatically cut costs, and then run the product for as long as they can at a profit before breaking it down and selling it off
In the 80's people who did this were known as "corperate raiders". Nowadays it's just called business.
Vimeo employed somewhere north of a thousand people a year ago with 28% being in the engineering team (according to random google results - this isn't an area I have personal knowledge of). If they dropped from around 300 people to 15 that sounds like gutting - not trimming.
They will be hiring up but not the same people. Bending Spoons tends to replace high silicon valley wages with high Italy wages which is a considerable saving.
This is why I can't take any anti-immigration sentiments seriously in this country. An american founded company runs a business for 20 years, sells it off overseas, and the new owners kick all Americans out of the equation.
Response from America: "well that's just business, I guess". It was never about preserving American labor.
If the company was profitable they wouldn't have needed to sell. It was always living on borrowed time. If a US owner bought it they'd have done exactly the same thing (layoffs) albeit possibly with new jobs in a different state than country.
>If the company was profitable they wouldn't have needed to sell.
And it's always the workers who pays the price, not the businessman. Does that see fair?
>If a US owner bought it they'd have done exactly the same thing (layoffs) albeit possibly with new jobs in a different state than country.
That'd be unfortunate, but it still means jobs are created in the US. It also gives he opportunity (slim) to have people move in the country. Moving the jobs overseas, not quite as mobile.
But yes, the big issue here is the lack of decorum in how we recklessly cut jobs here. This isn't how most 1st world coutnries work.
It sounds like they're trying to extract as much money as possible from a SaaS subscription service that's no longer actually paying any devs.
From my perspective as a one-time (but no longer) paying user of evernote - WTF am I paying for monthly if not to support a dev team?
Seriously - I get that there are infra costs for some of the services, and I wouldn't mind paying those costs plus a reasonable upcharge, but I'm sure as fuck not going to pay a company $100+ a year subscription to store under a GB of data.
So now I host bookstack and I pay backblaze ~$0.22/m to back up all my notes, which is much closer to real costs for these services if they're not under development.
Genuine question, why not use a free Git service or something
I pay for Sourcehut now, but until recently I was using a free private GitHub account to sync my notes in Obsidian. It works fine and cost me nothing (at least nominally).
The honest answer is because I backup a large number of other things to backblaze anyways.
I went on a mission about 5 years ago to essentially stop paying for SaaS services if there was an opensource alternative available that I could self host.
I have old machines lying around anyways since I was upgrading about every 5 years for gaming. So I have a 5 node k8s cluster in my basement serving about 20 different services that I use, and I no longer pay for basically any subscription software.
Git is fine for text content, (hell, I have about 25 personal repos on github anyways, although speaking of... most are mirrored to a local gitea instance) but it's not a great solution for backing up DBs, binary data, media, photos, etc...
Eventually - I'll likely replace backblaze with a NAS at a family member's house, but for now - it's very cheap and the billing is fair (usage based billing, not the exorbitant monthly fees most SaaS services charge).
---
Plus - I really like the flexibility of web based services. I don't have to remember to sync anything with bookstack, I just hit 'https://bookstack.[mydomain]' in a browser from any machine I want - Friends house? works. Public library? works. Wife's phone? works. Work laptop? works. etc... you get the idea.
Even after accounting for the initial outlay for a large NAS and my extra power consumption - I broke even in just under 3 years self hosting. Turns out SaaS is sorta a scam if you're technically capable.
And absolutely more power to ya for finding your own alternative solution!
Corporate raiders is a bit of a different concept. That implies a hostile takeover. Like aggressively buying up shares in order acquire a majority stake and set company policy against the wishes of other insiders.
Bending Spoons is what we'd call vulture capitalists which have and continue to exist. Basically they buy weakening businesses and carve them up for parts, selling anything of value and squeezing max revenue of whatever is left.
> Basically they buy weakening businesses and carve them up for parts, selling anything of value and squeezing max revenue of whatever is left.
People say this like it's a bad thing, but without "vulture capitalists", struggling companies would default and banks would attempt to do the same, except they are much worse at it and even more people would lose their jobs.
What's hard to understand? They switch the companies from growth (no matter the cost) to revenue extraction (even if it will eventually fade)
Minimum viable cost of keeping the lights on. And sometimes they even compromise a little, "let's spend a tiny bit more and see how much growth we can get from that"
If your comment is referring to the bending spoons business model, it's worth pointing out they are not VC, they are private equity.
If your comment is referring to the software company's exiting to provide a return to shareholders, that happens all the time whether it's venture-backed or privately owned. The owners of privately held bootstrapped companies still want an exit one day too.
As an open source software engineer who is now a venture capital investor, respectfully, I think your beef is with capitalism, not with the institutional investors.
Not in the startup world beyond what I pick up on HN, but this distinction was helpful. My mental model going forward:
- If a company is still validating the business model and optimizing for rapid growth, it’s typically a Venture Capitalist (VC) fit.
- If a company is already established and the play is to improve operations, scale, or restructure (often involving a change of control), it’s typically a Private Equity (PE) fit.
Reminder that restructure often means a company working just fine, but whose assets outstrip what PE can buy it for, so they strip it to the bones. Or they leverage it with debt against assets then pay that money to themselves for consulting, account/hr services that they force the company to outsource to other PE companies. Nothing is 'created' through this process, no value created/added, nor it is healthy capitalism as the company could have continued fine without this added leveraged debt that was purely used to profit PE.
The Bending Spoons business model is right out of the private equity playbook. Buy a business with good revenue, cut cost to turn this into a consistent revenue stream, generate annual returns.
This is not like making a small 20 person self funded company.
Comments like the above one refer to community vibes, the types of comments that will get you lots of praise/upvotes.
So while individuals have different beliefs, the "average expected top comment" for communities like HN is usually pretty predictable, and hence the cognitive dissonance of the community on the whole can be called out.
There are now more private equity funds in the USA than McDonalds. The maximum wealth extraction of every single thing in people's lives is not viable for a continuing healthy society.
What if there isn't a feasible path for expansion and growth? Vimeo already has contracting revenue, it's either in the maturity or decline phase.
Some customers will churn, some will stay, Bending Spoons are the masters of this model so will have made an assumption on how revenue will change across the next 5-10 years+, but I would assume that they aren't forecasting extreme growth, and instead are calculating that net profit can be changed from c$30m to c$139m within existing revenue, so if they can keep revenue at/near current levels without growth, they can end up with a much more profitable business.
Bear in mind that same revenue doesn't necessarily mean the same number of customers - it can also mean raising prices and having less customers. Bending Spoons might estimate that if they double prices, half their customers might leave - this would still be BRILLIANT for profit, as while revenue would stay the same, some costs would half, and thus profit might jump from c$140m to c$250m based on some napkin math!
For example, they bought the German hiking and cycling app Komoot. It's a mature app in terms of functionality, with a stable user base. There's little chance of hypergrowth with this type of app. It's also complicated to switch apps because transferring routes, collections, photos, etc. to another service is difficult.
They laid off 90% of the teams. They migrated the app to their infrastructure to pool costs. Since then, there has been no further development of the service.
It's also complicated to switch apps because transferring routes, collections, photos, etc. to another service is difficult.
Not really, sync everything through Strava, and then drop whichever service you don't want. Basically any bike ride I've done in the past decade is on 3+ services because they all sync.
What I understand from listening to the management from various podcasts, it was a mix of shipping the most minimum impactful features with the leanest product team needed and then jacking up the price every year for the people that can't move away from these products.
It's called butt cigar investing or corporate raiding.
They acquire startups and companies without a huge growth potential but modest cash flow and little profits.
They cut the operating expenses to the minimum and jack up the prices to sky rocket profits till their mathematical models will tell them they will profit on the investment.
Why would it be detrimental to society? Many companies have developed all the products they're likely to ever develop, so why would you maintain the same level of operational costs as when you expected growth? There's no guarantee that the prices charged before the acquisition were sustainable either.
They don't just maintain these products, they enshittify them to extract the maximum possible profit from captive users, until someone else comes in and builds everything from scratch all over again.
This is crazy inefficient yet it's not captured in our economic theories, so we're essentially blind to it.
Not much you can do. The alternative is bankruptcy that does a similar thing to workers. But it at least doesn't let the company make blatant lies of a PR statement.
The main thing to do is make it so you can't just lay off people as easily as you can in the US for pretty much no reason. But it seems workers are still too divided to really come together and achieve such 9initiatives. Be it unions, pressuring their governments to make new laws, or simply chastising and boycotting companies who engage on such actions.
In healthy working free market. There should be competition delivering better product at cheaper price.
Maybe one thing we should do is to allow suing company executives for breach of fiduciary duty when they waste resources on some useless project or feature. This could make many companies more efficient.
Oh and also ban dumping. You should not be allowed to sell stuff below cost of production. Development effort with big maybe ignored.
Society has more money and way more votes than PE. I'm going to quote A Bugs Life (1998) of all things here:
> Hopper: You let one ant stand up to us, then they all might stand up! Those puny little ants outnumber us a hundred to one and if they ever figure that out there goes our way of life! It's not about food, it's about keeping those ants in line.
I suspect that the free cash flow of those who seek fewer regulations of this sort on thing exceeds the free cash flow of those who seek more.
People that are being squeezed by PE have less money to wield as political influence partially because they are being squeezed by PE.
The ones doing the squeezing are ok with that.
The people who are uninvolved, who fit into neither box, don't care enough or don't have enough money they're able & willing to part with. They also don't have fancy accountants or corporate accounts to expense it to.
>The people who are uninvolved, who fit into neither box, don't care enough
That lack of care is going to cost us all in ways we'll be forced to care about one day. Not necessarily for Vimeo, but definitely much more important things that people are ignorant or actively turning their heads against.
> They also don't have fancy accountants or corporate accounts to expense it to.
We call them our represenatives. We expense it to them with our votes (and literal expenses with tax dollars we are forced to part with). But votes require care and we're back in the loop.
> That lack of care is going to cost us all in ways we'll be forced to care about one day.
By then, it'll be too late. The ruling party has a monopoly on violence, perpetrated by sycophants and enabled by wide-area surveillance analyzed by AI. We're a matter of months (maybe years) away from kill-drones being used with impunity against the populace.
> We expense it to them with our votes
Gerrymandering by the ruling party has ensured that your vote won't make a difference. Even if it did, election interference by the ruling party has ensured that it won't be counted. Even if it is, the ruling party has expressed its wishes to cancel elections, and who's gonna stop them when they have all the kill-drones and thugs, paid out of a bottomless bank account?
SaaS is the detriment to society. Static feature software continually updated and changed to create a faux justification for $20 of your money a month, keeping you on an endless treadmill to in order to work with all your old data.
Sometime in the late 00's they realized people were still happily using software from the 90's, because it worked for their needs, and well, we can't have that...
But what actual change do you want when the very founders of these companies like Vimeo, multi-multi-millionaires decide to sell their life's work, customers and workers very well knowing what the fate's gonna be, just to be even more wealthier?
To summarize what I put in another response: I personally care less about holding the multi millionaire into account (though I wouldn't mind it at all) and more about making sure employees over such deals aren't lied to and then have lives upended at the drop of a hat. Workers and customers do not in fact "know what the fate's gonna be" and that's the problem to address.
I won't repeat the same usual solutions again, but I'll mention one thing that already exists: the WARN act. The spirit of this is good, to give employees a 3 month buffer of when their job is ending. But it's clearly abused at worst, and not enforced at best. It's not as good as other countries' worker rights, but ot exists today to be looked at. In addition, severance can help to. This is standard, but even the "generous packages" in the US tend to be on the lower end of what other countries need to do.
Basically, it shouldn't be a drop dead easy decision for a company to mass layoff and have the workers surprised at the facs. It needs to both be slowed down and give immediate short term costs. That's a start of "kinda actual change" to strive for.
#2 is why the government, via laws, needs to establish employment rights, such as redundancy payments when someone is terminated due to their position being no longer required.
Those rights need to show up in company balance sheets as a contingent liability.
That applies when the company is acquired as well.
The employment of a company need to be either paid out to employees at net present value, or need to be transferred to the new owners as part of the sale.
In the US, with employment sponsored health insurance, it's even more important.
1. we're on a tech forum and can quickly link to other discussions on the company. Many employees may not even be aware there was a change in management. If they were, their statement outright lied to them saying they still wanted to continue to grow. Meanwhile, many Vimeo clients won't know about this for months or even years. So no, not everyone knew.
2. And I'm saying a cooperation shouldn't be able to make reckless decisions like "lets lay off most of our workforce" withotu reprecussions. Like most civilized societies outside the US do. Thats's what the bulk of my previous response is about.
What are you arguing? That you can do anything you want to something you own? That's not true for nearly anything in modern society.
> I don't understand this model. Such significant layoffs would indicate that there is no real appetite for expansion or growth.
To play devil's advocate, maybe there's a point where a product or service needs to stop evolving and just be.
I have a Vimeo account that's been on auto-resubscribe for years. I couldn't tell you a single feature they've added in the last 5 years, but they host my videos, collect stats, and let me send links to my friends, and that's really all I want.
I imagine a lot of companies have contracts with Vimeo and switching costs are real. They'll likely stick with Vimeo if they manage to maintain their offering to the level it exists at today. In the long term I think it guarantees death but they will be able to extract plenty of money before that happens.
The long tail of revenue is not only a substantial sum, but decays more steadily than growth. This is a low risk investment that still turns a profit.
It's also not their only investment or even necessarily their own money. Individual holding companies don't tell you much about the larger pool of money they come from.
They did the same thing with Komoot and other apps. I don't understand where the money comes from and how they are planning to keep this portfolio growing.
It seems to all be debt financed, i.e. just a private equity model slightly specialized for tech. The "innovation" is that Bending Spoons has an in-house engineering team it seems they try to keep constant yet scale out to all the acquisitions. I hadn't looked into them much before, but https://www.colinkeeley.com/blog/bending-spoons-operating-ma... is an interesting report -- though not focused on the finance side.
(For Komoot) Did they, though? I am aware of the layoffs, but after that they slightly redesigned the app, collected the poll for next year's requested features, the lifetime maps option is still there to buy etc. If not for HN, I wouldn't have noticed any change in the direction that it's going in.
I suspect that the VAST majority of users want their saas tools to do today what they did yesterday, and so stopping active development of new features is actually a positive - no sudden Liquid Ass is going to appear in a program in maintenance mode.
you're absolutely right, they're not positioned for expansion or growth. you're very close to seeing the private capital dark pattern that's become a huge part of our economics lately. let me illustrate for you how they make money by decoupling the company's success from the investors' success
1) borrow a bunch of money to buy the company - this is called a leveraged buyout
2) once you're in control, have the company assume the debt you took on in order to buy it. you as the buyer are now free and clear, and the company is now responsible for paying back the money you borrowed to buy it. the end result of this transaction is that the company now owns stock that is less desirable because the company is more leveraged
3) make huge cuts everywhere and use the money "saved" by divesting from your own future to pay yourself as a consultant
The company is now in the extremely fragile position of not being able to spend to respond to the market because all of their income is going to servicing debt and paying the members of the private capital group. the "investors" aren't actually invested at all because even if the stock they hold becomes worthless they didn't pay anything for it in the first place, the company did. the thing limps along for as long as it can keep bringing in some small amount of income for the "investors" to skim off the top of, then it inevitably dies like anything riddled with parasites will, the company declares bankruptcy and they sell the copper out of the walls in order to pay back the loan used to take the company private in the first place
My best guess is that a part of it is replacing US (or in this case Israeli) devs with much cheaper Italian/European ones, earning ~a quarter of their US counterparts and working longer hours, as Bending Spoons has an extremely competitive hiring process, and is probably the highest paying tech company in Italy
AFAIK that's what they offer to juniors straight out of university and usually even give a substantial pay rise after the first year. I don't know other places in Italy that can match that.
This is just my personal opinion, but if they didnt change the price of Evernote and never made any changes, I probably would remain a customer for a very very long time. There is a high switching cost for me to use any app to move all my docs, and notes.
I dont know if the same can be said for Vimeo, though
You're assuming all or most paying customers are paying attention. That is sometimes not the case. For example folks/businesses who forgot they signed up. Alternatively it could be that the cost to switch is too painful.
One of the advantages of their business model is that it's low risk. Find a business you can get cheap enough, shut off all investment related to growth or product improvement, and use the product's moat to get as much cash as possible from current customers. Business doesn't have to be about expanding into new markets or growing revenue. If I had to guess, there's not much of a market for the companies they're acquiring because everyone else is looking for growth.
The growth comes from increasing subscription value, not from adding users. They bet that the platform is sticky enough for the users that they’ll slowly boil the frog until there’s no more equity left.
No, they just come in and offer a lot of money to the current owners. Bending spoons are ruthless businesspeople but AFAIK they do offer a reasonable price for the businesses they acquire.
(I used to work for WeTransfer and some time after I left it got acquired at about the price it was once considering IPO-ing at. This was apparently such a good offer that it took very little deliberation to agree to the deal.)
but where does the money come from? it seems like a good way to avoid regulatory scrutiny if your acquisition goal is to simply exit a competitor from the market.
The money comes from investors. Private Equity basically works by taking money from investors to buy companies and turn a profit with them, paying back the investors when they do so (it's a very illiquid and risky investment, so the advertised returns tend to be higher, but it does seem like a lot of firms are struggling to actually make it work).
Aye - it’s a simple business model, which seemed to work well in an era of low interest rates. However some of these tech buyouts seem quite myopic, making it almost appear like the goal was to shutdown the company.
You really seem to want to believe Bending Spoons buys companies just to shut them down, for reasons that are not entirely clear unless you believe that they're owned by a secret conspiracy made out of note-taking, file transfer and video hosting companies that is willing to engage in a multi decade plot to very slowly buy out competitors. They then shut down the acquired businesses for no clear benefit, even though they're still profitable and new competitors could easily start up. So this conspiracy (if it exists) would be very slow and not very effective in keeping down competitors, especially compared to all the other things the conspiring companies could be doing.
Each individual company Bending Spoons acquires has a limited lifespan, so if you only look at a single deal it can indeed look myopic. But the whole point of their business model is that they use the cash flow thrown off by the acquired businesses (which are much more profitable for a short while due to firing 75% of personnel) to fund the next acquisitions. This can keep going on indefinitely, or at least until there are no more businesses to acquire.
Bait and switch is something completely different.
If you started buying Evernote 10 or 15 years ago, and use it a lot, then Evernote gets acquired and the terms change, that's shitty but is not remotely a "bait and switch."
You bought a relationship with a service company that locked you in and sold you out. That's absolutely a bait and switch, just one of service instead of goods, because it's a SaaS company.
This is the real reason I'm tired of subscriptions. I don't even care about the "pay in perpetuity" problem in some cases, I just don't want the entity I chose to do business with to completely change.
So it's sort of a "white-dwarf maker" company. Pick a company with a steady cashflow, eject all the fluff that made it a big star, and collect the remaining energy / cash until the core cools down. The end state is a cold slab of iron, and nothing new is going to happen to the acquired business ever since, but the plentiful (if dwindling) cashflow will be collected without any obstacles.
This requires reinvesting profits into the company. It sounds like they choose not to do that, but instead switched to cashing in.
If the profits are stable and supported by a fraction of the workforce, then why keep the rest around? Clearly a shitty thing to do, but business-wise it makes sense.
Look at the companies they're acquiring - it's 100% about getting user data and tertiary monetization, and they're making bank. They couldn't care less about what the companies they buy supposedly do.
This is the same model Computer Associates used to run back in the day. Find product with marginal profit but dedicated user base, cut costs, increase pricing and milk it until the next product comes along.
Is this any different than the SaaS business model, except a 3rd party bought the company to strip it?
Everything SaaS these days, hell every subscription these days seems to involve product enshittification + rising pricing. Is this the end game of the financialization of everything?
Oh, it will - but they don't care. I'm sure they'll eek out 1.5b from their 1.3b acquisition and be happy as clams.
It certainly is depressing to look at what was built and what could be made of it but most of the folks with money lack the creativity or skill to actually build a lasting business. Just burn it down and rob it on the way out - such is the modern economy.
I mean, Broadcom / VmWare is basically doing the same, just more for enterprise level software.
OTOH - if Vimeo has given up all hope of further new features, then giving current users the chance to keep going isn't completely evil, even if it's at a higher price. VmWare is basically doing the same, and lots of customers are leaving, and those who aren't may still eventually do so, etc. (Edit: what if the alternative was Vimeo shutting down?)
Think of vintage car parts - if you absolutely want to restore that '30s Ford (keep using 20+ year old software) - someone offering an OEM-equivalent part for 3x what it cost back in the day (even adjusted for inflation) may actually still be good value - because what other alternatives are there?
Now - does it suck for the employees? Sure. One thing an econ prof said back in the late 90s (who loved to guest-lecture to CS/SWEng students): your job as a software person is to put other people out of work by automating stuff they used to do manually. Are you ok with that? Because if you're not, you should go into a different industry right now. Feels much worse when it's programmers getting the axe due to finance types, but not unexpected.
It's a whole business model. I know a Private Equity that bought AOL dial up business, laid off most staff and turned into a cash cow. Mostly because almost all customers are super old and can agree on anything "AOL" throws at them.
Elon Musk acquired Twitter and fired %80 of the employees and it was just fine.
I bet there's so many more people that can be let go from all tech industry. It's mature and product discovery is mostly locked behind advertisement so what's left is exploitation.
If you think about it, as long as you don't mingle much with the product that works it keeps working indefinitely. It's no different than running Excel or WhatsApp, especially when the servers are managed by 3rd party providers these days.
Losing tens of billions of dollars on a company now ruined down to single digit billions of revenue is a weird thing to describe as "just fine". That looks like abject failure as a business.
Fire the engineers but don't do the nazi stuff. The software functions just fine, lack of engineers isn't the reason of the downfall of Twitter. If anything, it's better product than ever, it's just that it harbors too many deplorable people.
BendingSpoon CEO: "At Bending Spoons, we acquire companies with the expectation of owning and operating them indefinitely, and we look forward to realizing Vimeo’s full potential as we reach new heights together"
Vimeo CEO: "We are excited about this partnership, which we believe will unlock even greater focus for our team and customers as we continue to strive towards our global mission to be the most innovative and trusted video platform in the world for businesses"
Words no longer appear to mean things. While this isn't a surprise, it provides another data point that there can be no trust given to leaders words. I find it sad as it simply re-inforces this behaviour and normalises it.
I worked at one of the companies that were acquired by Bending Spoons and really the only positive things I can say about them is: They are honest and stick to their word.
It's a shitty business model, run by people who do not, in any way shape or form, care about people at all. But they are honest.
So if you work at a company and BS comes knocking: relax, accept the severance money and start looking for something new. It will be over soon. And you also don't want to stay even if offered because it will be an entirely alien environment where only people of a certain character can work.
> where only people of a certain character can work
Out of curiosity, could you expand on this? Gutting engineering playgrounds and other inefficient crap to maximize ROI sounds like a fun challenge. It's essentially performance optimization but applied to a whole infrastructure as opposed to individual parts.
Applied through the proverbial front door a few months back to have a chat and unsurprisingly got a generic rejection, but wouldn't mind trying again using a better channel. Question is of course whether they'd be willing to pay enough to make it worthwhile.
some people look at business as making money for the sake of making money. However other people look at making money as a means to better society. This goes back over a century to the Quaker run businesses, like Lloyds, Rowntree, Cadburys, etc.
You can imagine if your ultimate aim was to improve society, then acquiring a firm but having to sack a bunch of employees as somewhat of a failure.
>some people look at business as making money for the sake of making money. However other people look at making money as a means to better society.
if the two sides you describe agree on those definitions as mutually exclusive but in union describing the universal set of people, then they are both wrong.
as long as people engaged in a market make their own choices, then money is a direct measure of happiness on the margin. you give somebody your money in exchange for something you want and would rather have: this creates happiness out of thin air.
if you think a better society is a happier society, then going into business to make money is the same as going into business to make society better.
> as long as people engaged in a market make their own choices, then money is a direct measure of happiness on the margin
That is a big if which is straightforwardly false. This idea of market participants' choices being entirely free rests on the efficient market fallacy [0]. Whereas the reality is that even the structure of a market itself creates friction. One of the main points of business schools is learning how to recognize and take advantage of this structural friction, which business people then conveniently forget when it's time to assuage their own egos regarding their counterparties.
[0] which is basically in the realm of asserting P == NP. The supreme irony is that if the efficient market fallacy were true, then central planning would also work as well!
No, you cannot necessarily to choose whether to transact or not. For life's necessities (eg food, shelter) this is straightforwardly obvious. And you are making this claim in the context of the employment market, which is one step removed from that.
But even in the general case your argument still does not make sense. When we talk of a business providing societal utility, we don't include the business owner themselves in the integral. For example your assertion lets you conclude things like a casino owner who has made a pile of money but impoverished the community has made society better.
>No, you cannot necessarily to choose whether to transact or not.
I didn't say you could, pay closer attention or you will not be able to understand arguments or learn anything.
What I said was, "as long as people engaged in a market make their own choices, then money is a direct measure of happiness on the margin."
however, your mistake does contain a germ of reinforcement to what I said: if you cannot choose to participate in a transaction, you will be less happy, i.e. allowing sellers to offer choices and buyers to make choices will increase happiness in every type of market.
before you make another mistake and go shooting off, I didnt say people will be happy, I said they will be happier, but happier is an unmitigated good.
Try harder to not be a condescending dweeb, or you will not be able to have amicable discussions or overcome your own airtight but inapplicable logic.
I did not "reinforce" the exception of what you said, I pointed out an error in your framing that necessitates coming at the analysis a different way. The context of what you're responding to is a company laying people off - reducing the number of choices in the employment market. We're not talking about the dynamic of someone creating a new business and having to emphasize one or the other, but rather an existing business where the owners are choosing to change things to be closer to one end of the spectrum between the two.
what you are actually saying is that a certain class of people "know better" than what another class thinks they want.
If you look at financial markets and finance theory, there is no validity to the idea that people are long term blind and short term mistaken. markets discount the future, they are the best estimates of the future rather than somebody with no skin in the game magically "knowing better"
its plausible for companies to be worth less than their assets. While it might be the best estimate its still not necessarily the best one. aka the market can stay crazy longer than you can stay solvent. Markets measure confidence as much as they measure value.
and this explains why the USA doesn't have universal healthcare, or why a generation of the world's population now serve as eyeballs for advertisers using applications specifically designed to be addictive in order to enrich silicon valley startups. You certaintly wouldn't get here if you started with the question "how do we want society to look like?"
Imagine if the owners of modern day factories thought a little more like this [0].
Here's the rub: Vimeo was profitable, and had no debt. Per their last public filing(s), in 2025 the company had:
- ~$400M expenses
- ~$420M revenue (therefore ~$20M profit for the year)
- ~$300M of cash in the bank (no debt)
Vimeo has not had major growth in recent years, but it was making progress, however slowly. Just nowhere near the 10x expectations out there. Nobody was going to lose anything.
Presumably Bending Spoons believes they can optimize a lot of that 400M expenses while keeping revenue flat or even growing it. At least they believe enough to make a 1.4B bet on it.
This sounds more like a reverse mortgage line of business, to me. Bending Spoons is betting they can eek enough revenue out of Vimeo to pay the interest on the $1.4B loan by cutting the $400M expense run rate.
The actual loan principal will be paid out (if it ever does) of the money they expect to bring in when they inevitably go to an IPO.
And at that point you have speculators carrying risk, bankers getting rich off interest, leadership raking in millions, and a once reasonably healthy business is jeopardized (subject to the performance of other Bending Spoons properties, risky management, etc). All in the name of growth that may or may not be achievable.
Your options are too coarse. There's good and bad ways to get fired (and there's nothing here saying they got a severance to begin with). How about a 3 month warning? How about guaranteeing a 6 or more month severance after those 3 monhts? How about even before this sell goes through you make sure employees benefit from the 1.4b with more than "well my company stock got a tiny bump"?
What I see here is "Business stays afloat, investes make money for now, customers get a continually worse service and eventually leave, and a lot of good talent is out on the streets over corporate greed". This is only a win if you're an investor, and only in the short term. So I'm not convinced this is better than option A in the long term.
very few people can do the mental gymnastics required to equate " we look forward to realizing Vimeo’s full potential as we reach new heights together " to "you're all getting fired."
at some point in the now far-distant past CEOs used to make heartfelt speeches and memos to a soon-to-be-downsized staff about how hard decisions had to be made and blah-blah-blah; now it's more about sequestering the decision makers away from the damaged goods while projecting daisies and sunshine for would-be investors.
The game has shifted far from the human factor into a purely financial/investor loop. Good for some people but generally worse for people .
And before I hear it : Yes it was always about money, but business wasn't always about investors . That projection of liability to a remote party is exactly the issue.
Bending Spoon's business model has been -- at least for a decade -- buying companies that didn't operate profitably; stopping or slowing ongoing eng investments; and operating them profitably. Often that involves raising prices, but everyone is adults here.
Nobody lied. Vimeo will continue to operate, and probably will even have targeted ongoing development.
You can't point out the place where they promised the workers jobs. Because there was no such commitment, either before or after the sale.
The company failed. In 4 years, they managed to turn the valuation from $8.5B to $1.4B. No employee should be in any way surprised by what happens when you watch your company's valuation fall that much. Anyone surprised by this wasn't paying any attention to the company's operating metrics (they only made $27m last year!) to a negligent extent.
It sucks for the people let go, but they can't be surprised.
you're arguing de facto with de jure. Not a historically healthy way to argue. We aren't lawyers here.
>Anyone surprised by this wasn't paying any attention to the company's operating metrics
Dude, I just want layoffs to be signaled ahead of time. You can defend billionaires all you want and gaslight engineers for not being marketing majors. My demands are very simple.
Everyone saw 21: -50m, 22: -80m, 23: 21m, 24: 27m and knew this was a dead company walking. With one or more annual founds of layoffs since at least 2023. Oh, and low revenue growth and falling subscriber counts.
That's not marketing or gaslighting, that's expecting people to pay minimal attention to their employer's financial performance. Minimal here being on the level of possessing object permanence.
It's a moral failure to fire people without any notice for reasons unrelated to your company failining and not being able to afford you, yes. Let's not mince words here.
There are proper ways to let go of people, but that's not how it's done in the US.
Obviously sometimes a business is unsustainable, and it's unavoidable, but it's pretty sociopathic to not consider that people are harmed by being laid off.
>The end of an at-will employment agreement is not a harm.
So if you got fired tomorrow for no reason in particular, you would not feel "harmed"? No family to support, bills to pay, or career to progress cut short? No trips nor big purchases that need to be re-planed or cancelled? No obligations you need to cancel because last week you were fine and this week it's all about scambling for a new job? This is the most asinine thing I've heard here yet.
I didn't have a choice in my society on what contract to take. And the power dynamic is unequal. I don't consider being suddenly laid off as "harmless" with that in mind.
They were at-will employment. That should have been considered with their every purchasing decision ever. Their personal and moral failures is not their employers failures.
Budgeting is trivial thing. Spend less than you earn. And it is not like these were minimum wage workers. They should have known to have plenty of buffers at this point. It is entirely their own fault of not reach that point.
After reading through the other comments about bending spoons and reading yours again: the bending spoons CEO is technically telling the truth! They intend to run the acquired companies forever. After cutting most of the staff, but he didn’t say that part of course.
I wouldn't even say it's "technically" the truth. It's just the truth. Nothing in the statement even comes close to implying that there wouldn't be layoffs. Hell, one of the quotes even mentions "focus", which if anything is a euphemism or hint for downsizing in these kinds of statements, not the opposite.
"excited about this partnership, which we believe will unlock even greater focus for our team and customers as we continue to strive towards our global mission to be the most innovative and trusted video platform in the world for businesses"
There's no hint of laying off all the staff here though. Now it sounds like they "were" excited to lay off people to maximize profits.
Maybe "unlock even greater focus for our team" means to unlock their focus to find other jobs but it's quite perverse. I agree with the OP, that "Words no longer appear to mean things"
> There's no hint of laying off all the staff here though. Now it sounds like they "were" excited to lay off people to maximize profits.
What? Just because a statement says "we're excited to do X" doesn't mean they're not also planning to do A, B, C, Y and Z.
I'm not defending the layoff. It just seems weird to interpret the statement itself as somehow being misleading about a subject that it literally didn't mention.
There's letter and spirit of the word. You're arguing against the spirit of the word because the letter of the word is technically impossible to prove as a lie right now.
We call this lawful evil logic for a reason. It's how you empower stuff like Jim Crow laws (or the current US administration in general. "Well he isn't going to actually invade a NATO ally, he's just saying he wants Greenland. I want a Ferrari!")
You want the truth? You can't handle the truth! :-)
Those words weren't truth. Truth would have been to state the intent to fire employees in order to maximise profit. This was always going to be the outcome, and it was expected, why not just state it clearly?
Again, when truth becomes a grey area that is to be manipulated for maximising profits that benefit a minority of privileged individuals, we should be concerned and at the least, not normalise it with "its just business".
I don't like layoffs, but if the statement in September said "we are going to lay off most of our talent in January for blah blah blah corporate mumbo jumbo", it'd suck but I'd see nothing wrong with it. The employees get a 3 month warning to plan around, and the company can do whatever it wants from there.
A reasonable person, when told "Company A is buying and will operate Company B," would interpret that as "all of Company B" including its assets, liabilities, cash, property, patents, AND employees. They would not think "Well, ackshually, they're just buying the corporate entity itself, which doesn't technically involve keeping the employees..."
If "reasonable person" means "someone with literally zero experience reading any business or acquisition news whatsoever" then I agree with you. Hell, the OP literally begins the announcement with, "As expected."
if corporations only exist to make the rich richer, maybe it's time to eat the rich. Corporations' outward goals used to be to satisfy their customers. That may have never been the internal case, but it isn't even pretended to be so nowadays.
Severely downsizing the company isnt a good vibe to a customer. I'd definitely be migrating off Vimeo if I did any serious business with them.
Any reasonable person who has paid attention to business news over their lifetime would not be surprised to see layoffs following a corporate acquisition.
But even more, it seems like the statement implies layoffs if they are acquiring a startup or growth-orient company. Bending Spoon is saying they intend to run the web site/web app as-is and make money. That means they will discard employees who have been employed with hope of growing/pivoting/etc the company. In start-ups, that can be a lot of the employees.
Yes. It's a zero trust society. Nobody can trust anybody else. The only thing that's trusted is money in a bank account... And we really shouldn't be trusting our eyes there because the money is backed by nothing and there is no reliable consensus between different banks (look at the details of correspondant banking and factor in things like the Eurodollar, stablecoins...).
It's like; the thing we trust the most cannot be trusted but so long as we keep using money in its current form, this implicit form of trust is devaluing the trust of everything else that's not money.
Our relationship with money sets the bar for all other relationships. If it's a deceptive relationship and we tolerate it, we will tolerate every other relationship which is equally deceptive. We become accustomed and tolerant to a certain level of deception. We are also emboldened to deceive others.
Our relationship with money is highly deceptive and getting worse over time. We can expect to see the same trend in our relationships.
I think money CAN buy trust; it works by devaluing the entire concept of trust to the level that it can afford to buy it outright. It maintains a monopoly on trust.
So are we just going to acept that words no longer mean anything and carry on through life distructing of everything we navigate through? That isn't the only way.
Imagine what would happen if we tried these actions like we do for real murder trials.
"CEO John Doe is found Guilty of maiming Company B to the point of bleeding it dry of its funds, resulting in bankruptsy. Due to person-hood laws, we sentence you to life in prison. Thank you for your attention on this matter."
This is potentially disastrous to content on the web. Vimeo provides a platform-as-a-service known as OTT, that powers well known branded streaming services, like Criterion Channel, HistoryHit, Dropout, DIRTVision, Speed 51, URLTV, Armflix, MHz Choice, Trinity Broadcasting Network, SommTV, IndieFlix, BroadwayHD, Full Moon Features, etc.
Probably they will also fire remaining 15 people and move everything to Italy.
Their strategy is to
- fire everyone,
- give product to very small but ambitious team of people
- cut free version of the product to minimum even if does not make a sense to have a free version such as 5 video upload per month etc (they are doing this just to avoid backlash from users and community)
- use every possible dark pattern exist to get every penny from the users
As a longtime user of Vimeo (since 2009), I was afraid this was going to happen. I built our own HLS video streaming in-house a couple of years ago and never looked back. Way faster, lightweight player, uses modern apis and codecs.
Now I'm working on productizing that at https://framerate.com/ (beta launches next week!)
Nice work. Aren’t there decent open source alternatives though? What do you think your differentiation will be vs. a customer using an open source solution and hosting the video chunks on a CDN - or even S3?
There aren't any end-to-end open source video host solutions out there from what I can tell. DIY ffmpeg + a CDN is a great way to go. But quickly erodes when you want all the other niceties that are table-stakes today (like storyboards, subtitles, chapters, etc.).
I'll have all the niceties, but I plan to differentiate mainly on performance and quality.
- Higher quality compression (via AV1 encoding)
- Fast load times worldwide (Framerate's custom player is 18kb gzipped versus 200kb+ for vidstack/mux)
- Better publishing experience (bulk editing options, team collaboration, etc.)
Sounds good. I’d suggest niching down and talking to some customers to see who genuinely cares about those things - as they might turn out (tragically I know) to be things only techies care about.
Fair warning.. when we hear talk to customers we are tempted to reply “I talked to customer in my mind and they love my thing!”
But unfortunately customers in our minds don’t have money :)
There’re either customers out there, or if not there's learning about why youtube has almost 100% market share..
I see these acquisitions as a reset. They spend a huge sum to acquire established, but struggling, products and strip the size of the company to the minimum required to keep it operating. This is very much the Musk model.
At this point they have stopped the cash bleeding and made profit margins healthy again. From there they can more easily rationalise how to take it forward over the next 5-10 years.
That might mean stripping unpopular product features, rebranding, going upmarket, whatever.
It’s a real shame for all the staff, of course, but from a business point of view it’s going to be interesting to see how it plays out.
That's partially due to history: Vimeo was split out of CollegeHumor, and CollegeHumor became Dropout. (Both were part of IAC and were spun out/sold off.)
Dropout originally only used Vimeo for video distribution. They switched to Vimeo for OTT only after running their own with a team of developers and finding it to be an unexpectedly hard task. I think I learned that in the Sam Reich Hank Green Decoder interview.
Well, some good news is that if you've ever wanted to build a new video streaming platform there are a bunch of companies that'd love to sign up.
I'm sure dropout et all will be able to continue with their same level of functionality in the short term but I can imagine the bills they'll be receiving will be escalating quickly.
Dropout's CEO has been pretty open about the company, and he described their early efforts as 'Brutal'
> No! We tried, but people don’t realize this. The first rendition of Dropout was built on Vimeo OTT’s API, but it was our own product. We employed something like eight sophisticated engineers at IAC to build our own product around it, and it was brutal. Which is to say, it’s just very hard to do very well. And these were great engineers.
Wonder what this means for vimeo/psalm, the static analyzer for PHP, which has recently seen some new life breathed into it after long neglect. Psalm has credible alternatives in PHPStan and now Mago, but it would still be a loss to see it go unmaintained again.
I routinely see job postings by them in my local dev circles, significantly above market rate, and the offers seem to keep reappearing forever. Their site namedrops known apps and services like wetransfer but otherwise seems to be just buzzwords.
Are they VC buying existing IPs?
What is exactly going on?
I guess that companies which get bought might be a bit "overstaffed" from the startup phase or because planned further development. If one removes this staff, you need less people to minimally maintain a running app. But itcs just a guess, you'll loose knowhow too, when drastically reducing your staff.
I describe Bending Spoons as an Italian private equity company. The CEO openly admits that the business model involves buying companies and trying to squeeze as much profit out of them.
This comment from e98cuenc seems extremely prescient.
> Everybody loves to hate BendingSpoon, but there is a lesson here. They consistently rewrite the code of their acquisitions with a tiny team, fire everybody and are able to maintain and improve the product. They basically skip everything but engineers, and they are kept at a minimum. Feedback from users is the products they take over 1) become more expensive, 2) they ship features waaaay faster.
It looks like next generation private equity, and my guess is more houses will start copying them
Considering what Bending Spoons did to Meetup.com after buying the site, I wouldn't trust them to improve a product. Here are some of the issues I noticed.
- Group searches consistently return irrelevant results across multiple cities. As a test, I tried searching for soccer groups in Dallas, Texas, and one of the results was for a backgammon group. Users will also often have a hard time finding events I host on Meetup.
- An organizer being charged $357.98 per year to host a group on Meetup.com.
- The pages for my Meetup events are full of clutter and duplicate data, while relevant information such as RSVPs is hidden.
- My Meetup.com home page is full of pointless distractions, including a banner asking me to become an organizer when I already organize events.
- When editing an event, Meetup shows an option to generate a description by using generative AI. Generative AI is a scam and I try to avoid it.
That being said, you are right that they are becoming more expensive and ship features faster. I describe Bending Spoons as Italian private equity.
As a heavy Meetup user, I can say that Bending Spoons absolutely fixed some glaring, long-standing bugs. But their massive price increases have really driven people away, and some of their attempts to grab more money (Meetup+) really rankled a lot of people. Also, search still sucks.
This is why "running lean" for a B2C business is never something to take as a good sign from the consumer standpoint. Let alone the client. Those savings are not being passed to you, quite the contrary. they will in fact have their care and eat it by trying to throw more costs at you despite the supposed lower overhead.
Honestly, I wish more businesses would do this. It turns out that grandiose dreams make grandiose staffing, but a lot of great business ideas would thrive and bloom if the gardeners would just prune them back more often.
The part about "they get more expensive" makes me actively not want this, despite otherwise being someone obsessed with optimization. I'm not here to optimize billionaires' pockets at the expense of the people I actually make the product for.
I don’t understand the basis for your hostility here to charging more money and making a profit, especially given that Hacker News is founded and run by a venture capital firm whose goal is repeatedly that in hundreds of attempts at once. At minimum, Vimeo should have been raising prices by inflation% per year, and I’m pretty sure they weren’t doing that. Better the platform continue and thrive doing what works than founder uselessly on the zero-price pivot shoals like most startups these days. And there’s a sense of cosmic irony that both Vimeo and Dropout are now run by a very small team rather than a large one. Perhaps Vimeo will learn the lesson of Dropout and switch to the boring but effective 100% paying-customers-only model that other successful businesses use. I’m rooting for them.
I just cancelled my account that I've had for about 10 years... maybe longer. I barely used it, but it's now >$100/year for my plan. I had maybe 15 videos uploaded that I would share occasionally.
I used to be an indie filmmaker and used it to host features when nothing else could. I’ve been paying since 2008. The price would go up but they were great so I let it be.
An interesting aspect is that they acquire US companies, where it is legally possible to lay off employees. In Italy, where BS is based, firing employees is much more difficult
They acquired European companies in the past and did similar things (e.g. Komoot). They are in the process of acquiring Eventbrite, where a big part of the workforce is located in Spain, and the feeling is that they are going to do the same there.
It will probably take more time due to legal processes and severance packages may be better, but I don't think this is going to stop them, let's see.
Our business uses Vimeo because we get a discounted rate on acami CDN via their bulk purchasing power. YouTube is free but that comes with a lot of headaches. For example not being able to hide the recommended videos at the end of a video, which annoyed our clients in the past when we did use YouTube. YouTube also needs to be public to be embeddable, which also created issues for us.
However this announcement has me terrified and literally scrambling for a backup plan.
Youtube also doesn't let you replace an already-uploaded video while maintaining the URL, which is incredibly painful if you need to edit a posted video for whatever reason.
If it's a small number of videos, specifically ones that are unlikely to go viral, then a self-hosted or externally paid hosted peertube site might be a good option.
We are probably just going to self host. We already self host several TB of images (proxied by CDNs) we are just going to do the same with our videos. Most of our videos are only watched for a few weeks before they are basically never viewed again. Our plan is currently to use backblaze for the older stuff their b2 storage is pretty affordable. Proxied by another server and a CDN so the popular stuff sits on the CDN and the older stuff is accessible but might take a few moments to bring up. This is acceptable to our business model.
Vimeo you manage your brand and presentation. YouTube you have little control over where or how your video is presented.
Vimeo also provides VOD for some large brands and media companies.
Yeah, it's this. It's a hosting platform, not a social media platform. You see a ton of people who have short films, art projects, commercial portfolios and stuff like that hosted at Vimeo. They don't need/want comments, discoverability, or to deal with things like automated DRM takedowns. Clean, simple, video hosting.
I built my own course presentation platform (for my own courses, not as a thing I resell), but I wasn't going to host my own videos. I use Vimeo. It's great: I upload to them, embed an iframe, job done. I don't care about maintaining a video player or bandwidth or subtitles or…
Literally the week after I launched my thing, they got bought. I have no idea what I'll do if they go to shit.
I was planning to use Vimeo for some video hosting... I guess I'll have to self-host now. Oh well. At least this happened before I actually committed to buying a plan or even creating an account. With private equity poisoning the well like this I'll probably be better off hosting my videos in AWS; doubt anybody will be buying them anytime soon.
Yes bending spoon will stop growing these companies and stop add features. These role will be just replaced by engineers and employee in Italy, where bending spoon is form, and where people cost many times less than in the US.
Italy is like a higher quality India in a sense.
Bending Spoons pays very high rates for their own engineers.
Of course if your comparison is Bay Area or Zurich, there's no match, but if you exclude such outliers (where the compensation is what it is due to the insane costs of living and competition for talent) they are paying rates higher than pretty much any other part of the world.
They pay rates that are closer if not higher than London or Munich averages (which are very high).
> Italy is like a higher quality India in a sense.
It's attitudes like this that rub decisionmakers who aren't of European heritage the wrong way.
Italian tech salaries [0] aren't significantly different from Indian tech salaries [1], especially in major hubs like Bangalore [2].
If companies like Google [5], Broadcom [6], and Nvidia [7] can afford to pay EU level salaries in India and decided to heavily invest in hiring in India, it shows that Indian talent can't be underestimated.
Also, a European dismissing Indian engineering quality doesn't bode well as your governments that are signing an FTA [3] and a security and defense partnership [4] with India in a couple days, and with the Italian government soliciting Indian capital for infrastructure investment [8] and the French government soliciting Indian capital for defense [9] and infrastructure [10] investment.
i have made https://codekeep.io for storing snippets, have similar features to evernote. all users will get free pro membership now. if you are thinking about moving , please consider codekeep too.
Vimeo’s prices are insanely low for what they’re offering. You could not host on AWS and match them on price, nor probably even Hetzner. I never knew if they built out custom infrastructure or if they’ve just been losing money this whole time.
Lots of custom infrastructure. A bit of losing money as well, but moderately profitable on the whole. They were a publicly traded company in their own right from 2021 to 2025, so you can look at the 10-Ks. There was a massive boost in business from COVID in 2020 and early 2021... which meant that the spinoff in May 2021 left investors in a position to be perpetually disappointed, sort of like Peloton.
The spinoff definitely came at a particularly bad time, but that was always how it was going to end up because that is how IAC operates. Vimeo was probably doomed from the moment IAC acquired Connected Ventures. It was never going to be the kind of business that could really operate as a public company, but totally could have been a profitable private company.
The custom stuff was all on the transcoding and player sides. Actual video file storage and delivery was using a variety of well-known CDNs depending on when and where, but primarily Akamai.
I was wondering what I used by this company because I saw the name yesterday. It's Harvest, and I was thinking yesterday how the sign up and pricing page seems more or less abandoned. Guess it's time to roll my own version
For all the valid criticism of Bending Spoon's business model, I'd like to raise another point.
They haven't extorted these companies from the previous shareholders and founders. They paid for those.
We talking about multi millionaires deciding to throw away their life's work, their customers, their teams to become even wealthier very well knowing what the fate was going to be.
Every gas station, grocery store, convenience store, pharmacy, urgent care, every bank, every tech company, every computer manufacturer, most food production companies, most farms, every resource extraction company, every manufacturing company.
Any health care organization - from your list, pharmacies and urgent care - that is profit-driven is not holding health as top priority.
If an organization that should be focused on making people healthy is instead focused on how many currency units it can extract from other entities, there is (as they say) a misalignment of priorities.
What I've always found unusual (but not necessarily bad) about BS is ... how come a company that came out of nowhere starts buying tech companies here and there? Billion dollar deals? In cash?
It can't be just a few "enthusiastic" random guys (as they portray), you need a lot of capital to pull that off.
IMO they're someone's family office with an obfuscated name.
Edit: and my comment suddenly goes to the bottom despite having several upvotes ... definitely not sus.
The founder recently went on invest like the best and explained it top to bottom, they started as a broke agency and grew from there quite fast. I forget the details but I would imagine they are financed quite heavily by LP's
Someone has actual financial plan. I know a unknown thing for VC and startups. If they do and can calculate reasonable rat of return on acquisition it makes sense for lot of investors. Especially when they start to have proven record.
Having paying customers, stopping giving things away for free and then cutting costs like wages and moon shots projects. A software starts to be tech again. That is marginal unit costs really do work.
Bending Spoons' playbook: acquire established product, gut the team, run it on fumes with skeleton crew + AI tooling. They did this with Evernote, Meetup, now Vimeo. Classic private equity move dressed up as a tech company. Extract value, minimize costs, ride the brand until it dies.
> Classic private equity move dressed up as a tech company.
Kinda, more like a tech company using private equity tactics.
Say what you want about them, but they do actually employ decent engineers, and the founders are all engineers.
They seem to fundamentally understand the companies they are buying (not always the feeling I get with PE).
Their business model is a bit cynical, but I would still consider them a tech company.
This is typical of Bending Spoons. They make an acquisition, lay off as many people as possible, then start jacking up prices and putting features behind ever larger paywalls. They've got to start feeling the pain of user churn and attrition at some point, but not yet, I guess.
- Buy a product that has name recognition overshadowed by a monopolistic company and the leadership is trying to make a pivot and failing terribly.
- Leadership is aggressively rebranding to appease a takeover. They keep doing the most basic forbes council op-ed title moves to make the product appealing.
- It is not a parts-shop, the team is used to sense of "eh what you are going to do about it". It is a signboard and patents that you can use to hostage bigger companies.
- The takeover company has figured out maintenance engineering. You buy the product, you cull the team because they are not a growth engine. You focus on maintenance, and you milk the brand. Any eastern European or LATAM team can approve an automated version bump PR and send out "let's jump on a call" email.
Heck, even Tai fricking Lopez bought Radio Shack under similar pretense.
Is there a solid source for this?
Vimeo laid off most of their operation in Israel recently.[1] At least according to "www.calcalistech.com", which seems to be some minor news source in Israel. Their comment was that the office was damaged in a recent war. Rebuilding may not have been worth it.
Their headquarters is in New York.
[1] https://www.calcalistech.com/ctechnews/article/sjtjgbabzx
Someone that worked at Vimeo until last month tweeted:
> Reviving this account to say: Almost everyone at Vimeo was laid off yesterday, including the entire video team. If you're looking for talented engineers, there are a few on the market.
https://x.com/daemon404/status/2013988239829303624
Bending Spoons understandably don’t want a final percentage out there, because the more people know about this, the less likely they are to use Vimeo.
Most everyone I knew there was just laid off, with a skeleton crew that’s been asked to stay on until April.
They're not publicly traded (they appear to be pre-IPO "startup", made out of acquisitions), but it seems weird to me that there can be such a thing as secret layoffs.
People use Vimeo?
I know this wasn't an entirely honest question, but yes, absolutely. You probably see Vimeo videos every day without realizing it, because most of the viewing isn't done on vimeo.com. It's videos on other sites, and the customers can pay to have their branding, not Vimeo's, so if you're buying something online and it has a product video... might be Vimeo. Or one of those websites that have big header splashes with full-video backgrounds. Or a subscription "channel" like Martha Stewart TV with mobile and smart-TV apps. Or a million other things.
Once at Vimeo, maybe 7 or 8 years ago, I was working on putting out the fires of an extremely weird operational issue where a bug in a cloud provider's software-defined networking stack led to corrupted HTTP responses, which got stored in CDN caches, causing persistent playback issues for users (playback not starting, or locking up in the middle). The cloud provider had reported it as a "packet loss" issue, because for the most part the misdirected packets would get rejected by the receiving TCP stack for having the wrong sequence number or whatever, but one time in a billion they would get through and wreak havoc... and we were moving enough traffic that those one-in-a-billion flukes were happening constantly.
I was musing in the shared chat with one of our CDN partners that, with no real way to tell what files were affected, the only way to fix the playback issues for everyone (short of waiting a month for all the cached objects to age out) would be to simply purge the whole cache. I immediately got a bold all caps DON'T EVEN THINK ABOUT DOING THAT in response. If we flushed the whole cache, the origin traffic to refill it would have saturated some internet links to the point of DoSing other customers and probably getting on CNN that evening. And that was then. Traffic levels got significantly higher later on.
They have a product where you can make your own whitelabeled video site, which is used by some popular services, ex. Dropout.
My local karate school used them in the COVID era to build an app for practicing at home. I've used it off and on, though the occasional oblique reference to COVID is a bit amusing sometimes. Never mentioned by name but there's an occasional reference to "as we're stuck at home" and such. They use Vimeo to whitelabel the service.
Whatever they're paying for it, it is too much. Video availability drops in and out. Sometimes the video works. Sometimes it doesn't work at all and gives a weird error. Sometimes it doesn't work and it claims that it "can't guarantee the security of my connection", even though other videos work fine. Sometimes videos that didn't work yesterday work today. I've been tempted to go to their app developer and try to show them how to just host it themselves in S3 or something, which would probably still be much cheaper than what Vimeo is charging. The Vimeo player embedded into the app is extremely minimalistic, for instance, it can't cast to anything, which is a pretty useful feature for something you don't want to be staring at your phone for.
I found I can Favorite a video, which then makes me log in to a Vimeo account, then it adds it as a Favorite to my Vimeo account despite being private, and then I can view it through the Vimeo app proper, although that also seems to have lost the ability to cast to anything in my house lately. Casting is a clusterfuck of its own with the mismatched capabilities matrix of what can cast to what under what circumstances anyhow, but Vimeo seems distinctly behind on that front. It's honestly significantly worse now than the default video player a browser offers at this point.
But it was probably relatively easy for them to set it up ~5 years ago, before Vimeo collapsed.
A notable difference to their (somewhat) contemporary, Nebula. Nebula made the choice to develop their own services, to also own the customer billing relation. Dropout relies on Vimeo for all that.
Are there other services doing whitelabel video sites? (Apart from porn, I'm sure there is a few) I only know of Floatplane providing whitelabel for William Osman's sauceplus.com recently.
They have 1000s if not 100s and 1000s of customers. I know because my company is an edtech platform and we have a lot of customers using vimeo as their video host.
I recently used it to watch "Revolution of our times", a documentary about the 2019 Hong Kong protests. As far as I could tell, this is the only legal way to stream the movie.
They used to have a free tier with no ads, and I still have some videos on there. All new stuff goes on Peertube.
Vimeo’s editor’s pick is my go to place for getting/staying inspired…
The BusinessInsider story is as much as you're going to get right now, because Bending Spoons is declining to provide specifics, and those just let go aren't free to tell all. But yes, "globally" means significant cuts in New York and the US in general.
Calcalist is the news source for the tech community here in Israel. Admittedly the English site is complete rubbish compared to the Hebrew site - but it's still THE local source.
https://businessinsider.com/vimeo-laying-off-staff-after-bil...
As always, claims like this should come with the WARN Act notice record. There's only been one notice in NYC in 2026 (visible at https://dol.ny.gov/warn-dashboard) and it's not Vimeo or Bending Spoons. I don't see one in Q4 2025, either.
Most of the ones with a "date posted" in Jan 2026 have a "date of notice" two to five months ago.
I am surprised so many people don't understand the business model of Bending Spoons or are bewildered by it.
In conventional infrastructure and product development you need engineering staff to build the product; once the product is built you need very little engineering. If you build a house you don't keep the builders on payroll once it's built to keep "building" it - you may need maintenance staff but that's it - if you need to keep the full team of builders around then something is wrong and you may want to seek a refund for the original builders' fees since they did not actually finish building it.
Builders and electricians and tradesmen either work as contractors and take that into account (charging higher rates to compensate for the sporadic nature of the work) or work full-time for companies who then resell their services on building projects (charging accordingly to ensure there is enough revenue to pay a full-time payroll of said tradesmen).
Tech was an outlier in this case because ZIRP allowed companies to retain full engineering teams to keep "engineering" the product even once product-market-fit has been achieved and the product has been stabilized and finished. This gave a lot of engineers the illusion that perpetual "engineering" of a single product/service is a sustainable model and career.
Bending Spoons' business model is to buy finished products, cut off the deadweight and keep operating the product and actually making profit off the finished product, which was always a normal thing in every other industry.
For tech people that see themselves as builders, this should be normal and expected - they should charge competitive rates for their services taking into account the expectation that they're building something for someone else to make money off once it's built and that they won't be part of it once that's done (unless they want to negotiate an actual stake in the company). For tech people that don't, this is a difficult wake up call, but the earlier the better - the old situation was never sustainable to begin with.
The economics are different because the industries are fundamentally different. Software is never "finished" the way a building is finished. More features can always be added to software. If those new features create new product lines and attract new revenue, then the software engineers' salaries are more than paying for themselves.
But, this obviously carries risk, that the new thing you develop won't be worth as much as you spent. Bending Spoons doesn't want risk, hence their decision.
> Software is never "finished"
Software may never be finished (in your opinion) but the budget of any customer is finite. If you keep reinvesting your revenue forever into "engineering" the product there's going to be a time where a competitor comes in with a finished product matching your customers' requirements and snatches him from you by both charging less and making a profit.
There’s also the much more common case of a competitor coming in with a similar product that has a few more features matching the customers’ requirements… which explains the endless product development treadmill that companies find themselves on.
Software doesn’t win by being “finished” it wins by out competing other software
Yeah, if Youtube was "finished" we wouldn't have had Youtube Red, Youtube shorts, Youtube music, etc.
And yes, I am making a good case for mature software with those lovely examples. But clearly they wanted more widgets and they kept engineers who can deliver those widgets. This wasn't some unsustainable thing for Youtube as the top comment argues. And that's how most software businesses work as of now. If you remain complacent, you're slowly dying to competition. Because the demand for more still exists.
The number of customers is, effectively, infinite though. YouTube continues to be engineered and continues to grow. It could have, realistically, been finished over a decade ago. But they repeated branch out into new markets with new features, and that seems to work from them.
But YouTube is still a growing and maybe a profitable business (they disclose its revenue but not costs).
Bending Spoons buys stalled or failed products and keeps them alive with a central engineering team in Italy which is far cheaper than anything in the US.
That's their business model. If the company you work for is acquired by them you should start looking for a new place.
The new features are an order of magnitude less complexity to build than the main feature - hosting video at scale, which is complete and just requires maintenance.
> hosting video at scale,
I'm going on a limb here and saying that the scale that YouTube was running on back in 2010-2015 is not the same scale as now, and if they had left their whole infrastructure unchanged, a "finished product", so to speak, the site would have been feeling dated and would have eventually been killed off.
Without having access to the source code we can only speculate but I believe even in those days YouTube already outgrew vertical scaling and thus had to be built as a horizontally-scalable system. That is the hard part.
Adding extra nodes to an existing horizontally-scalable system (that has already been operating and has its bugs ironed out) is much easier.
That is really a bit of an oversimplification IMO. Please check, for example, the Netflix tech blog and read about what has changed in the past 10 years or so when it comes to architecting video processing and video delivery systems. There's a tremendous amount of engineering work there which advances the entire industry. For instance, it's not trivial to add live events to a VoD infrastructure at that scale — it's not like you just add a few more nodes and buy faster encoders.
Its a different skill set. And if its not one that you have or are interested in then it makes for a great time to exit.
Potential revenue growth is only as finite as your ideas (and ability to execute on them).
Just look at Google. They could have stopped writing new software at any point and been just fine. But in the long run they'd have missed out on trillions of dollars.
As with everything in business, it comes down to risk/reward. Not every risk pays off, but some do.
But for every outlier that can perpetually keep unlocking new revenue streams with more features, there's probably 100 companies that burn themselves out trying to do the same and end up sold for pennies on the dollar.
The key is knowing when to stop. Unfortunately permanent employment does not provide an incentive for anyone involved to speak up when they think it's that time.
>for every outlier that can perpetually keep unlocking new revenue streams with more features, there's probably 100 companies that burn themselves out trying to do the same and end up sold for pennies on the dollar.
Okay. Most businesses also fail. Is that a reason for existing ones to stop growing?
> Software may never be finished (in your opinion) but the budget of any customer is finite.
Not if you find new ways to appeal to them once you have them as users.
The search engine markets is finite, so Alphabet expanded elsewhere
> Not if you find new ways to appeal to them once you have them as users.
Doch, even then.
Back at university, we had practice sessions about our CVs and job interviews. Mine had a cliché in it, "committed to quality"*. The businessperson who was helping us figure out how to be any good at the jobs market, picked up on it with an example:
We nodded at "Porsche", as was the point. (I'm paraphrasing, it was over 20 years ago now).* I was 19 or 20 when I wrote that, it was about as true as when ChatGPT writes the same: I didn't know any better.
This is a weird example because there are crappy go-karts and there are carefully designed and assembled go-karts. You can have a high quality anything: car, truck, go-kart, trailer, wagon.
Even then... you reach a point where any additional quality or craftsmanship offers no more value. Aesthetics can have some arbitrary value, but even then it's a matter of taste.
> Software may never be finished (in your opinion) but the budget of any customer is finite.
The reason why software companies grow, is because businesses demands growth.
I suppose you could build a simple, small app and leave it on "maintenance" (even then, it's going to be difficult due to crumbling infra) but real world products don't work that way.
Companies want to scale, add features and expand to various verticals. They also have to compete with other companies , there is regulations, compliance and never ending list of incoming features from sales, marketing and customers.
Elon Musk famously attempted to run Twitter "lean", and look how that ended.
Unless you are able to curb the corporate greed, you will need to grow your engineering team.
> The reason why software companies grow, is because businesses demands growth.
There's only so much growth you can achieve in any vertical - the key is to realize when you've hit that limit and cut your losses. Unfortunately as a company employee you have no incentive to do that.
I doubt Vimeo would've sold if there was still lots of growth potential on the table. They've exhausted it, and for various factors were unable to cut costs internally.
Bending Spoons evaluated the situation and determined they can still extract a certain amount of profit by massively cutting costs - they gave chunk of said expected profit to the current owners, and are now implementing said strategy.
> Elon Musk famously attempted to run Twitter "lean", and look how that ended.
The decline of Twitter has all to do with Musk's politics and lack of any kind of strategy of the product (makes sense if you see it as his personal mouthpiece rather than a business). Tech-wise it seems to be working well enough. Cutting 80% of expensive engineering staff for a 1% drop in uptime of a non-critical service with no SLAs is a no-brainer.
> Elon Musk famously attempted to run Twitter "lean", and look how that ended.
This seemed to end pretty well. He overpaid for it, but the website kept functioning without issues.
I'm not really sure this argument makes sense. Plenty of software I've built is finished, it does the thing I need it to do and I haven't touched it in years. Adding features just because is not a useful way to spend anyone's time, doubly so in a business context.
> Adding features just because is not a useful way to spend anyone's time, doubly so in a business context.
You could make this statement about anything. "Building a new hospital wing just because is not a useful way to spend anyone's time", "Adding an extra drive-thru lane just because is not a useful way to spend anyone's time". The point is that it's not "just because", it's because you believe it can grow your revenue.
On the other hand, if you don't believe that, then don't invest. Nobody's saying you have to. If you think my comment is saying that, you've misread it.
> You could make this statement about anything. "Building a new hospital wing just because is not a useful way to spend anyone's time", "Adding an extra drive-thru lane just because is not a useful way to spend anyone's time". The point is that it's not "just because", it's because you believe it can grow your revenue.
You can, but do you really need the same sized team to add an extra lane to a drive-through as you needed to build the entire restaurant's building, kitchens, etc?
Do you need the same sized team to add a new wing to a building as the team that built the existing building(s)?
Hospitals expand because they either already don't or they project they won't meet demand. It's the same story with drive-thrus. These are things that are measured and analyzed. Adding features in the blind hope that more features equals more revenue is exactly how companies stagnate and burn. There's plenty of successful software products out there that are finished as far as the feature set goes, you'll find they power most of the industries outside of IT.
What kind of hospital keeps a construction team on staff so they can constantly be building new wings?
The businesses they acquire are ones whose revenue has not appreciably grown in many years. They are being sold because the prior owner does not believe they can improve the business any more.
Any profit bending spoons earns they can run off and invest in another business if they like. They don't bother investing in the businesses they purchase because they believe, like the previous owner believed, that there is no more juice to squeeze from that particular lemon.
Just like Computer Associates.
https://en.wikipedia.org/wiki/Computer_Associates
>Any profit bending spoons earns they can run off and invest in another business if they like
And the ones who helped make Vimeo what it is? left out in the cold to fend for themselves.
This is why loyalty is dead. Maybe if this billion dollar aquisition benefitted the workers there'd be less hard feelings, but that's not how capitalism works.
And the ones who helped make Vimeo what it is? left out in the cold to fend for themselves.
This is such a bizarre mentality to me. When you sell your car, do you send a cut of the money to your mechanic?
It is absolutely true that software can be finished, it's just that software appears to be dead if it hasn't had any work done on it for years. You don't need to keep adding features and changing the software ad infinitum.
Just like with your building analogy and with other car analogies presented here, software does need some maintanence every now and again to keep it up to date - with security fixes, compiling to a newer platform, integrating fixes from dependencies, etc. And yes while buildings may be finished they stil require regular maintance if they are used.
My argument is that the maintenance overhead of a finished product (or car, or building) should require much less effort than what it takes to build it - otherwise you should seek a refund from the original manufacturer(s).
That's absolutely not true in pretty much any mid scale software. You can have a team of 5 people make the core of an app, then need 50 people to help with support for customers. scaling up is never cheap, but software scalability is really low despite that.
That's not even true with a car. I'm about to spend 3000 dollars on a big repair for a car I bought 9 years ago used @ 3500. Even if you adjust for inflation we're still talking about 70% of the car's worth just to keep it running. As for a refund, the blue book value tops at 850 dollars.
> I'm about to spend 3000 dollars on a big repair for a car I bought 9 years ago used @ 3500. Even if you adjust for inflation we're still talking about 70% of the car's worth just to keep it running.
That's one way to run that ROI, sure, but is it correct?
1. The original $3.5k you spent is a sunk cost; you should ignore it, so your total cost of getting a running car is only $3k.
2. Even if you don't ignore it, your total bill to get a running car is $7.5k
In either of the above situations, you should be comparing the cost to get a running car by fixing your existing car (either $3k or $7.5k) to the cost of getting a running car by selling it as-is (so, perhaps +$500 as a parts donor -$X for a replacement running car).
Regardless of which calculus you are using, it's still going to come cheaper to fix the running car.
What the car is "worth" (however you define it) is irrelevant to the calculus.
That actually depends what kind of application you are building and maintaining.
From the sounds of it I assume you're talking about developing and maintaing a SaaS application, where there is no real maintanence of it, and instead what you end up doing is developing it further to support larger data sets and more people. That is of course assuming that the software is successful and the usage is growing.
For traditional desktop software you can declare it finished and then maintanence is minimal and limited to only critical bugs, so you'd have a team of 5 develop it and then 1 person or less maintain it.
> You don't need to keep adding features and changing the software ad infinitum.
I agree. I never claimed anyone needs to do this.
> Software is never "finished" the way a building is finished.
On the contrary, it absolutely can be, in both directions.
Software can absolutely be "feature complete", and in the case of many products it would have been an improvement to say "we're done now" and switch from developing new features to maintenance-only mode, dealing only with API changes and new laws.
Some examples of where it should be "done" by some point include smart TVs and smart lightbulbs. I'm also old enough to remember the era of games where patches were rare and small, unlike the current experience of having to wait for Steam to install updates almost every day, and only then will allow me to see if the game I want to play and which worked yesterday now has a mandatory update that I also have to wait for (which is less often but still often enough to be annoying).
Even with MacOS, while I absolutely do appreciate all the behind the scenes stuff regarding security and so on, the last time I appreciated what they did with the UI in an update, the version branding scheme was still to name releases after cats.
Even as an iOS developer, although I can see what they're trying to do with SwiftUI, I find it worse than UIKit in basically every regard because the "magic" keeps not working and the "problem" it tried to solve was never (for me) a problem; with concurrency, they went from GCD to Combine which IMO was a step back, before going to async/await.
"Too many features" is also a problem for the developers, as it leads to them duplicating work. For example, the background sounds feature on my phone and the one on my HomePod each has its own list of sounds, they're not just two interfaces to the same underlying app even though the HomePod's OS is a fork of tvOS which is a fork of iOS.
(The other way around, the home I grew up in is now about twice the size it was when my parents bought it around 1970, judging from the Google areal view).
I wish this was true.
Unfortunately when the software is done, the product lifetime comes to a close soon after. Everything around the product changes and the software needs to change to keep up. Smart lightbulbs need apps to keep working and you get kicked out of app stores if you don't keep up with never-ending churn Apple and Google imposes on you.
The only way to run older games is to use emulators and other 3rd party effort, that also needs to be continually updated. When you claim that any piece of software is done and completed, you've only externalized the effort required to keep it useful.
I absolutely agree with your pushback against feature creep. That is unfortunately a reflection of internal corporation value system, while the successful open source projects often know where to draw the line.
we should get to the state of software being finished.
then for live games etc -- release servers maybe after 7 years so people can run their own servers for games
I think we can all agree 7 years is a good enough timeline for games to have milked all the revenue they need.
37Signals still have early versions of Basecamp running
Jetbrains does the same thing with perpetual licenses etc
SAAS does not mean software can't be finished
> More features can always be added to software
How does that make it different? More features could always be added to most buildings. You could keep adding rooms onto the side, update the floors/ceilings/walls every year to stay trendy, add a water feature, expand the basement with a tunnel network, etc.
Buildings are never finished either that's why you have HoA fees and even with that many buildings end up in disrepair.
I think a better analogy than building construction is cars. You need to do active maintenance and fix things on cars to keep them running, you may even change out a radio or wheels, etc. like minor feature development, but you're not likely to change out the design of the engine and transmission. You definitely don't need the design crew from the car manufacturer around, aka Product Mgmt, to do maintenance but you do need some semblance of a tech team or people that can do the tech work on contract.
At some point a tech product is "finished" as in a mature, stable product and adding new things to it isn't going to do 10x in revenue. Its probably really hard for the product and tech teams involved to admit though.
I'd suggest commercial aircraft as an even better analogy than cars.
Most of the ongoing costs you mention for cars still apply--but there are also the occasional (possibly dramatic) changes to the interior 'cabin product' like new seats and entertainment systems, new fabrics/branding, new business class seats/pods, changes in seat layouts, etc in order to remain competitive in their market segment. Cars rarely have such significant refreshes, but software products often have analogous design and UX overhauls that are also intended to try to keep the software competitive in its market segment. And again airlines don't need to engage the specific airframe manufacturer like Boeing or Airbus for these, but they do need some semblance of a tech team that have certain domain expertise in aircraft engineering constraints.
Airframes also have major overhauls called MROs (Maintenance, Repair, and Overhaul) about every 6-10 years, which again does not require the original manufacturer but does require significant engineering expertise. To me this is akin to certain ongoing software maintenance activities like updating a codebase to use newer library versions, major database version updates, API or SDK version compatibility, etc.
> Builders and electricians and tradesmen either work as contractors and take that into account
okay. Salaries office workers don't work on contracts. If they do, they know an end is in sight and renewal is not guaranteed. If companies want contractors, they should just do that.
Meanwhie, I'm sure your parents' generation for many industries expected to find one job and make a career around that company, maybe doing 1 or 2 hops based on circumstances. It was highly unusual to lay off everyone at the drop of a hat. This is not normal, and I don't think we should normalize it.
To use your metaphor, this is more like you are working on the 3rd room of some house and suddenly you are kicked out. Contractors take this into account, but you as a salaried worker just need to bite the bullet. This is companies having their cake and eating it to.
>the old situation was never sustainable to begin with.
Tell that to the trillion dollar tech companies.
plenty of software business rely on contractors dont they? im sure even pre-acquisition vimeo likely used contractors on many roles some even in "engineering" roles.
the idea that software is never done is a double edge sword: yes, its great to have a long term vision that keeps evolving and motivating people to continue to push boundaries. but it also creates this idea that "done" state is not possible or even desirable.
plenty of human (economic) activity is just operating, or maintaining. maybe some people who built products are happy to continue operating and operating it. not everyone, and certainly it would be hard to expecy society to guarantee employment under any circunstances.
i have never seen labor laws that prohibits lay off under any circunstances. some make it more onerous and/or more beneficial conditiona to employees than others. but certainly is it possible (and likely) that vimeo lay offs have been lawfull and even beneficial for many employees. i certainly know plenty of people who explicitly stick around "mature" organizations waiting for the fat check of layoff
It’s a mystery to me, almost every product on market has serious user-facing issues that never get fixed. As if every company indeed have no development team, while all of them retain teams of developers.
It is simple. A productive developer can either:
* Fix things
* Build new things
Add to this that things naturally break. Try a git reset to 1 year ago and deploy that to prod, for example.
Add to that new features tend to add new bugs.
If you finish the backlog, you’ll get laid off,
the backlog keeps being increased (by you and your manager at times),
so it never gets finished.
Seems easy enough to explain.
There has to be a dragon being fought to account for all this money. Even if the dragon is bs.
Sometimes the dragon is technical debt.
When you’re historical Google, building three or more competing chat platforms…? That’s pretty much bs.
Downvote away, but consider a reply explaining why.
Vista Equity operates along a similar model for SAAS
cut wasteful spending, find a way to increase revenue - milk the SAAS for a few years - then either sell it off or shut it down - or it can keep running as a lean cash generating machine
Vista Equity rotates operators within its holding companies
I've been through a Vista Equity acquisition. It was not pretty -- they slashed, consolidated and basically ran their one-size-fits-all playbook. The brought in their crew -- which is totally expected -- and then bought other companies in the same vertical. Of course, they all had different tech stacks.
(like ya said, operators is the right word. it felt icky)
At least for the first year, the acquired teams were able to run more or less the same but with new hyped-up-overly-aggressive Vista hotshot managers and then the sh*t-from-above just started raining down.
Also, they hired the worst sw architect / person I've ever had to work with. He wasted so much time and money.
This is the same business model that Computer Associates used successfully in the 1990s, so it's not new to IT or technology.
The primary difference now is that the transition from bespoke IT on premises environments has been subsumed by the cloud hyperscalars and an entire hierarchy of products that use that infrastructure in a higher level of composability than in the past.
Products like SAP will continue to require engineering to maintain compatibility with the changes in its customers' requirements.
Products like MS-Word don't need that same level of feature work.
If a product is essentially feature complete then making the engineering a "maintenance only" support is about minimizing those support costs.
The thing about this business model is that it inevitably falls apart when things break.
Bending Spoons doesn’t care (yet), but they’re not at the point where stuff has proven unsustainable
Sure, but that's not a problem for the short term, and these guys can beef up support to keep it going if needed, just not invest in new features or chasing competitors.
Just like an old building, their business model is to sweat the asset until it's no longer viable. In the meantime, the cashflow goes directly to the bottom line.
Exactly why I charge $999/hour for my software consulting. To the doubters, laugh all you want, but I've been doing this for literal decades, and will absolutely slaughter LLM generated code in terms of code reliability and maintainability amortized over 5 years.
Won't be giving exact figures but that's my business model as well - I charge a premium because my job for clients is to make myself obsolete. If I "deliver" something that needs my constant presence then I haven't actually delivered. Of course, my price is high upfront because I'm budgeting in the fact that I strive to be out of there as soon as feasible instead of trying to stick around.
Some clients are ok with it, some don't; this is normal and what a competitive market should look like. I tell clients openly when my premium service is not the right fit for their current requirements or budget, and there are cases where cheaper labor or LLMs are absolutely a better fit (and they should come back once when/if they outgrow the cheaper, lower-quality product).
I'd love to do this and have a quite marketable resume, but it is extremely, extremely, unclear to me how you build a clientele or where you'd even start.
Only road I can imagine is highly specialized industry, with money, that often has time-sensitive needs, and smart management that knows how to recognize value or trusts their tech management. And even then I think you'd have to start in the coal-mines version of it, $50K/year flat salary, and building a reputation without management taking credit for your successes, somehow.
The hard part is to get the client on the phone.
Once you have them on the phone, you can not only better understand their problem but also demonstrate your skill and credibility in a way no resume or branding could.
At that point it's just a sales game - generally you'd avoid hourly rates and sell them a solution (see my other comment) which will maximize your effective hourly rate while being structured in a way that's very good value for the client. Hourly should be a last resort, at which point generally you'd rather have the client bounce, so you quote a high rate.
That last part is exactly why I charge $999/hour.
I'll offer a specific solution that takes me a week of full time work (14 hours each day -- I'm focused) for about $10k, which is roughly $150/hour if you want to calculate it that way, or another specific solution that takes me 3 weeks of 10 hour days for $15k which amounts to $100/hour. And like any good consultant, I'll eat the cost if I'm wrong. Other times I'll charge $40k when I know it will take a few months of dedicated work and I have to really lock in.
In practice, I never actually charge hourly. So the $999/hour is really Schrodinger's rate.
How do you get clients on that rate? Genuinely curious
Hourly rates are inherently risky for clients - you're asking them to part with money with no guaranteed outcome, so there's a natural ceiling where the financial risk becomes untenable regardless of your expertise and reputation.
Clients don't buy hours though, they buy solutions. They have problems costing them money or preventing revenue and they'll pay a percentage of that value to solve it. When you price based on solution value rather than time, your effective hourly rate merely becomes a function of your efficiency and expertise delivering said solution.
They key to achieving such a rate comes down to your sales and business skills: understanding what to sell, how to structure it to maximize your earnings and make it palatable for the client.
For example I generally avoid hourly billing except as a filter for time-wasters. Instead, consultancy becomes a loss leader for the real business: deeply understanding client problems and delivering high-value solutions. Clients happily pay premium rates when they see the price as a fraction of the solution's worth to them.
I only resort to quoting (quite high) hourly rates where it's clear the client just wants consultancy/advice (basically a glorified IT/business support) as a way to make it worth my time and gently encouraging them to bounce (I openly suggest more cost-effective options and refer them there).
OK so in this case how do you set the price? Based on the final solution to be delivered? Can you give one (or a few) concrete examples by any chance?
I am not sure if I fully understood what you meant exactly with your (detailed) reply.
You judge how valuable the solution is to your customer and then structure your pricing to maximize your profits while still being palatable to your client.
Let's say your client has a problem that will bring them 1k/hr of revenue when fixed. You think you can fix it in an hour.
You could quote them 5k/hour, because you think you can fix it in one hour and you estimate it'll take them at least 5 hours to find and talk to someone else who could fix it. This is a big gamble for the client, what if you don't fix it or take longer? The client balks.
Now let's say you offer a "reasonable" hourly rate like 150/hr. Your client is happy to take the gamble because 150 is peanuts compared to the value they get if you do fix it. Client takes the deal, you fix the problem, but you got paid peanuts.
Now let's say you offer them a no-fix-no-fee rate of 5k. The client is happy to take it because once the problem is solved it takes them just 5 hours to go back in profit, and they risk nothing if you end up not solving the problem. They take the deal, you fix it in an hour, the client happily pays you 5k, netting an hourly rate of 5k/hour.
Same hourly rate as the first scenario, yet the first scenario will cause everyone to balk while the second one is a steal for the client (in reality, you can actually charge more than 5k, how much more depends on your reputation and sales skills).
Very well explained - thank you!
Such consultancies feel like a dying art for the new work force. To consult, you need to be trusted. To be trusted, you need to already have experience working with software at scale. To get that experience you need to go through events like mass layoffs every few years, which limits your expertiese built.
I very much worry for Gen Z. Through no fault of their own.
I read it as:
“This is the price for me to do work I don’t want to do, but will do, if you make it impossible for me to say no.”
It’s not about justifying the rate, that’s the wrong way to think of it.
And if no one takes your price, you fail as a business. I think that's the concern. There's not a lot of vectors I feel I can jump in to say "I'll do this for 1000/hr" without getting some bulging eyes. Because I don't have the credibility to back that up.
How to get credibilty? Well, you gotta be in industry. The thing the two consultants here are besmirching. You can't win.
I think you're just looking at these negotiations from the wrong perspective.
> There's not a lot of vectors I feel I can jump in to say "I'll do this for 1000/hr" without getting some bulging eyes.
1000/hr might be a lot for you, for many businesses it's not even a meaningful expense, the bigger hassle for them is doing the paperwork to get the money sent out.
I'm well out of tech at this point, running a small lifestyle business in a different industry. At least once a month, I get people in my new industry offering me significant amounts of money to build them software. I don't have a fancy public tech resume; really, the only thing these people know is that I'm some relatively pleasant, rich, former tech guy.
1. Keep a portfolio.
2. Make and maintain connections.
3. Be pleasant to interact with.
4. Know what value you provide.
5. Find out what value people need.
If you're someone like Steve Jobs then #3 is a bit optional because #4 is increased, both in truth and in arrogant overestimation.
The hardest part of this really is #4, because most people either get too cocky and overconfident in the value they provide in general, or they are so overcome with imposter syndrome that they believe they offer practically nothing, so they do almost entirely open source work and fail to start a consultancy.
> And if no one takes your price, you fail as a business.
Vimeo employees and all the people part of the recent tech bloodbath experienced that too, but without even pocketing the upside beforehand. I'd argue that for anyone currently searching for a job, they will get a better ROI engaging in sales instead.
Any monkey can (and does) sling ChatGPT'd resumes at anything that moves, hoping to get the job and pocket enough salary before people catch on. That scam doesn't work with consultancy on a "paid on delivery" model, so the market there is much less crowded. There are different scams out there but those primarily target big companies.
> There's not a lot of vectors I feel I can jump in to say "I'll do this for 1000/hr"
We as techies know how the sausage is made and estimate a "fair" price based on the effort it would take us to do it. A car mechanic would probably also consider retail oil change prices to be unfair... because he's already invested in the knowledge and tooling and with those it's indeed a 5 min job.
From a business' perspective though, our work might as well be magic - we are writing prayers in an arcane language to make silicon come to life and do things that generate money for the business. It's magic that they have repeatedly failed to replicate for themselves. The latest fad is AI/LLMs and that will fail too - LLMs only work in the hands of a skilled operator - and otherwise fail disastrously and often generate extra remediation work on short notice.
If you worked in tech there's a good chance your past contributions are netting way more than 1k/hour to someone else already - so you can generate this value. The challenge now is to capture more of said value.
Nobody in their right mind will pay 10x market rate for no guarantee of result; see my other comments in this thread. This would open them up to the same scams that happen with permanent employees and third-world countries will be all over it the next day.
But if they are guaranteed a result then the calculus changes, they are no longer thinking of hourly rates but instead of as a fraction of the revenue enabled by your solution, and their risk is lowered to only the opportunity cost. This is a much better deal for the client. Your resulting hourly rate now purely depends on the value of the solution to the client divided by how quickly you can do the task.
You only explicitly quote the 10x market rate when you want the client to bounce because the job or client sounds like a nightmare. You will get some clients who are cheap and insist on an hourly rate to explicitly prevent you from playing the above game and earning the (much bigger) cut of the solution. The "fuck you" rate is for that, it's not expected to be taken, it's there to set a baseline price for your expertise and make the deals you offer sound more attractive in comparison.
It's basically all sales and reframing your work from salaried/hourly rate to how much your work is worth for potential clients (which doesn't scale linearly with time invested nor software complexity).
As to why am I giving you advice on how to compete with me? Because you're already competing with me by willing to settle for permanent employment market rate for the services I am offering. Encouraging you to charge more helps us both.
"You make $100, you pay me $20, I make pho you"
Have you tried Claude Opus 4.5 within Claude Code?
it's only been released for two months but its changed the calculus entirely
if its been over two months since you've tried any LLM generated code solution, or are still occasionally copy pasting code requirements into a browser chat session as if its still 2023, then I can't put any weight into the opinion
I've read this same comment for every model since GPT-3.
so have I and this time I wrote it, this broken clock only has to be right once, forever
its beneficial to check it
That's because it's been true for every major new model release since GPT-3.
HN is full of people who tried the free version of ChatGPT a couple of years ago, got a load of random hallucinated slop, and concluded it was all a bunch of useless hype. They enjoy parroting a lot of obsolete stuff they read once about stochastic parrots, without the slightest sense of irony.
When I was growing up, my old man recalled engineers who reacted the same way to transistors, which sucked even more than early-generation LLMs when they first came out. Most of them got over vacuum tubes eventually, though. So will most of the HN'ers, likely including you.
I don't know whose thoughts you're trying to attribute to me, but I've been pretty up-to-date myself (while still keeping myself to a $20/month budget that I switch between providers every few months).
Every generation has at best been a 5% improvement, and nothing revolutionary compared to the last generation. Absolutely no significant improvements between me selecting say Claude 3.7 Sonnet, Claude Sonnet 4, or Claude Sonnet 4.5. Still the same somewhat useful tool for specific purposes, still not good enough to be let loose on production, still not better than what I can do myself with 10 or so years of experience.
Genuinely useful from time to time? Sure, I agree completely. Anywhere near being revolutionary enough as people here insist on gaslighting themselves to be? Absolutely not. Not even remotely.
I'll grant that progress in coding hasn't been as impressive, although if you don't see a difference between Claude 3.7 Sonnet and 4.5 Opus (which is the actual SotA for Claude) I'd suspect a skill issue. I haven't seen miraculous progress in baseline code generation, but there has been a lot of progress in tool use. I can tell Claude CLI to install a complex package, for instance, and it will handle all the Python versioning and dependency-hell issues for me, then test and evaluate the results. 3.7 Sonnet couldn't do that, at least not reliably.
What's really different now is that LLMs have become useful research tools. Three or four years ago, models couldn't cite their sources at all. Two or three years ago, they started to gain the capability, but a large proportion of the citations would either be hallucinated or irrelevant. About a year ago, significant improvements started to emerge. At this point, I can give Gemini 3 Pro or GPT 5.2 Pro a multilayered research task, and end up with a report indistinguishable in accuracy and bibliographic quality from what a good human might produce in a couple of weeks.
It might take a half hour to get the answer, and I'm not sure if you could get the same result at the $20/month level, but the hype and promises we started hearing a couple of years ago are starting to bear fruit. The research models are now capable of performing at grad-student level. Not all the time, and not without making stuff up on occasion... but to argue that no progress at all has been made is nothing more or less than moon-landing denial.
> (which is the actual SotA for Claude)
Cool, how much of it can I use with a $20/month subscription? I'd reach the monthly limit within hours while gaining nothing. It's not that I never tried it, it's that I did and the difference is nowhere near worth 10x my money (nor even the wait time needed to get results).
> I'd suspect a skill issue.
There's 0 skill involved with asking a magic 8 ball to solve your problem for you. There's some skill involved with making it better for yourself consistently by cramming as much useful info as possible into the context window by writing very specific custom agents / skills / MCP servers / whatever, but I have yet to find a client that would pay me to spend an ungodly amount of time fucking around with my toolbelt instead of delivering results.
> Three or four years ago, models couldn't cite their sources at all. Two or three years ago, they started to gain the capability, but a large proportion of the citations would either be hallucinated or irrelevant. About a year ago, significant improvements started to emerge.
Let's translate that: You don't understand what they're doing under the hood when they "do that", you don't understand where that "improvement" is coming from, and I'm not interested in spending my time teaching you for free. For as little as €50/h, I'd be happy to! contact at my username.
> but the hype and promises we started hearing a couple of years ago are starting to bear fruit.
You're gaslighting yourself again in order to justify the price you're currently paying. Downgrade yourself back to $20 subscription, stick to it for one whole month, learn its limits properly, and then if you feel like you need to upgrade to a higher tier again, do so! Spoiler alert: it's gonna appear "significantly crappier" for about a week, and then after that week, you will get used to it and realise you've wasted a fuck ton of money on nothing.
> but to argue that no progress at all has been made is nothing more or less than moon-landing denial.
Where's that coming from? You're putting words into my mouth again. I specifically acknowledged small improvements, but I dismissed drastic improvements. Zero of what you said convinced me otherwise. For the love of all holy, use your own brain a little bit to actually understand the tools you're advocating for. Saying that you drank too much Kool-Aid would've been a severe understatement.
> but I have yet to find a client that would pay me to spend an ungodly amount of time fucking around with my toolbelt instead of delivering results.
right, yeah, I got started by being able to expense the $200 plan, and now I don't expense it but there's no going back, mostly because this is extremely undervalued and its unclear how long this deal will be around
Claude's $200/mo Max x20 plan is the best deal in the game, its equivalent to about $2600 worth of API credits, and is 4x more ability than the $100 plan (Max x5)
all roads to not really... caring... about why you're resistant to this. it's going to be too late when Anthropic raises the prices, all the reasons behind your reservations grow, unless someone else undercuts them just as well.
This is so true, and it's been genuinely painful for me to realize how fucking lazy and close-minded many in our industry actually are when you get down to it.
I understand your argument. But I have worked at two companies that worked pretty much like you described. They call it 'project-oriented'. They threw lots of engineers at projects, hired freelancers, and got it working as fast as possible. Once it was done, they only left a maintainer or two.
That model works fine for a few years. Then you need a bigger change. Often, the system is built on top of some enterprise project, heavily customized, and you stay at your outdated version until it becomes unsupported. The maintainers don't care, and often don't have the capability to upgrade, so they just leave it as long as it keeps working. Or maybe some law has been introduced and requires a bigger change. Or the market just changes, and you need to support new APIs, new payment methods, new integrations...
The maintainers tend to quit every 1-2 years and are replaced with someone only trained by the previous generation. With every generation, the maintainers get worse. After 3 generations, all product knowledge is gone. To make things worse, the maintainers do stupid things in the code because they don't fully understand it, and it begins to rot. In the worst case I know, no one even knew what branch was deployed on production and what the last changes were.
Then, after 5-10 years of decay, some requirement comes along that would require a major refactoring. Everybody is overwhelmed, no one understands the internals, and eventually they decide that it the project is now so outdated that the only solution is to replace it. Management doesn't care because they can blame their predecessors.
In my experience, that's how it always works. I know at least 5 major projects that took over a year to develop, and costing millions, in at least one case tens of millions, that died like that.
The fact that it's the norm for the builders of mature software to stick around can lead to some gross engineering inefficiencies. For instance, a lot of Evernote's backend infrastructure was manually managed [0]:
It's easy for companies to fall into such pits of inefficiency because climbing out of those pits entails utterly gutting the headcount [*].I wonder if the same is true at Vimeo, which employed ~250 engineers [1], which seems high for a mature product that's deliberately conservative (most of Vimeo's customers are B2B whitelabelers, for whom a constantly changing product is a massive downside.) It's not like video codecs or storage systems or web standards are changing daily. I would imagine a well-engineered codebase from 10 years ago would work well today with only minimal changes, mostly centered around updating libraries for security patches. The fact that they had 250 engineers on staff who presumably did more than play ping-pong all day makes me wonder if the codebase was not, in fact, well-engineered.
[0] https://www.colinkeeley.com/blog/bending-spoons-operating-ma...
[1] https://www.unifygtm.com/insights-headcount/vimeo
[*] Imagine the equivalent for a building: "we don't have automatic circuit breakers in this building; instead, we have a 24 hour staff of electricians who measure current with an ammeter and manually cut the power if it gets too high."
> With Evernote, Bending Spoons identified that the backend needed a complete rewrite. They moved from a monolithic architecture running on manually provisioned virtual machines to a microservices architecture with managed databases, significantly improving performance and scalability.
And accidentally turned it into a shitty product in the process :-)
"accidentally", huh. Such a charitable take.
Well, the goal of the optimizations wasn't to benefit the customer or even make the app faster. It was to make it easier for a skeleton crew to maintain. If that chopped out a few features, oh well.
>It's easy for companies to fall into such pits of inefficiency because climbing out of those pits entails utterly gutting the headcount [*].
It's also simply because no one will give you clearance to get out of those pitfalls. When you grow, you're focused on features, not optimization.
Bending spoons' approach isn't to grow, so you finally get to optimize what you couldn't... assuming you weren't already laid off by then.
>Imagine the equivalent for a building
buildings have regulations. And that word is still a boogeyman to many in the field of software.
That's not true at all though.
Car makers don't make a car and dismiss the entire engineering team.
Sure, you could do that, but eventually people are going to move on from your only car that's old and clunky.
That's exactly Bending Spoons model. Cut all the expenses, let the product die slowly. In the meantime you might have made more money than you put in to buy the product and the team.
It's basically bankrupcy management.
I think you're entirely correct.
I put it to not-tech people as: "[insert_ridiculous_valuation] is because you can fire everyone tomorrow and keep operating"
> "Tech was an outlier in this case because ZIRP allowed companies to retain full engineering teams to keep "engineering" the product despite it being essentially finished."
This is wrong, though, it's unnecessarily tying in a pop-finance obsession with ZIRP.
Unnecessary is the right word because it's not necessary for the rest of your post, you could cut it out and it wouldn't affect your argument or anyone's understanding.
Wrong is the right word because the dynamics it assumes are fantastical - companies took on debt to fund bloated engineering teams because no one noticed the engineering was done?
Additionally, ZIRP didn't induce this, this stuff happened, exactly the same, during ZIRP as well. Saw it in the iPad point of sale industry in early to mid 2010s.
A real finance nerd would point out ZIRP would in fact induce more of this behavior. It makes it cheaper for private equity/entities like Bending Spoons to take on debt to buy out companies and strip mine them. (strip mine being my word for this behavior)
> companies took on debt to fund bloated engineering teams because no one noticed the engineering was done
ZIRP allowed a lot of "businesses" to exist that wouldn't in a conventional, competitive capitalistic environment. Businesses in quotes because there was never any reasonable potential for profitability, but it didn't matter because VC money was cheap. Building a sustainable business is hard, playing "startup founder" and having that lifestyle subsidized by VCs is easier.
In that case, (over)engineering was part of the performance art that was required to keep your only revenue source: the next funding round. There was never any incentive to "finish" the product because doing that would put your business model (or lack thereof) to the test and stop the music. On the other hand, as long as cheap money is around you could endlessly "engineer" and pivot and bullshit around, chasing the next funding round and using that to pay yourself/your friends decent salaries.
During the ZIRP era it was all about "engagement" and DAUs/MAUs, then it was blockchain, and now it's all about AI. For those that have run out of grifts, they fold or "incredible journey" and get sold for pennies on the dollar to entities like Bending Spoons that do notice there are bloated engineering teams that can be cut.
You hold ZIRP caused this, then cite crypto and AI as continuations, both post-ZIRP. Which is it?
> as long as cheap money is around you could endlessly "engineer" and pivot and bullshit around
I lived this in a particular industry firmly inside the ZIRP era. It doesn't begin to describe how things actually worked. Even if ZIRP is synonymous with endless money to you, on their end, they still had to choose how to allocate it, and it was finite. You're not going to a bank for a loan, you beg people with experience in software to believe you're trending up.
> During the ZIRP era it was all about "engagement" and DAUs/MAUs, then it was blockchain, and now it's all about AI.
Do you genuinely believe DAUs/MAUs stopped mattering once crpyto, then AI, arrived?
Your argument requires believing that engineers collectively ran a con that no investor, board member, or executive noticed for a decade, and the only people who figured it out were PE firms after 2022. That's conspiracy theory dressed in finance vocabulary.
The leveraged buyout model you're praising as "normal capitalism" is itself subsidized by cheap debt. You've correctly identified that cheap money distorts incentives. You've just misidentified which side of the transaction is the distortion.
ZIRP was the era of where any tech startup was seen as a good investment no matter how stupid. Take any stupid business that doesn't work, say you do it with tech, get millions thrown at you. Then it was blockchain - same story, conventional business that doesn't work, but with blockchain - boom, instant money. Now the same with AI.
> you beg people with experience in software to believe you're trending up
Considering how much stupid shit I've seen funded (that quietly "incredible journey'd" away or folded by now) I don't think much begging was involved. Capital was desperate to find a place, no matter how ill-advised. Everyone in the startup food chain enjoyed it.
> Do you genuinely believe DAUs/MAUs stopped mattering once crpyto, then AI, arrived?
What started mattering is a clear path to monetize said DAUs/MAUs. You can't just show up with (potentially flawed) analytics saying you have DAUs and you're gonna figure out monetization later. Now you need to actually figure it out now and show up with analytics + proof of actually monetizing those users. Well, except if you're selling AI - then it's ok to sell inference at a major loss and figure out monetization later.
> collectively ran a con that no investor, board member, or executive noticed for a decade
"Investing" in a Ponzi can still be profitable as long as you get out before it collapses. There was a lot of passing around the hot potatoes between VCs too, so a VC can rightfully determine something to be a scam, but still invest if they believe SoftBank will happily hold the bag (and those guys ended up taking a lot of bags).
> "except if you're selling AI - then it's ok to sell inference at a major loss and figure out monetization later"
So the dynamic you attributed to ZIRP is alive and well, just wearing different clothes. Your original framework was "ZIRP allowed this, now real capitalism is correcting it." Now it's "this is permanent, it just rotates themes." These are different arguments.
> "Investing in a Ponzi can still be profitable as long as you get out before it collapses... a VC can rightfully determine something to be a scam, but still invest"
You've just moved the con from engineers to VCs. If investors knowingly played hot potato, then engineers weren't running a grift, they were employees doing jobs while capital played musical chairs above their heads.
So which is it: were engineers "deadweight" padding out finished products, or were they ordinary workers caught in a game VCs were knowingly playing? Because "VCs knew it was a scam but invested anyway" is a very different story than "engineers tricked everyone into thinking the product wasn't finished."
You're retreating into "everyone knew it was fake."
I'm making the argument that past bubbles like ZIRP, blockchain and now AI have given many engineers the illusion that "engineering" the same product forever is a sustainable endeavor.
Turns out that's not the case and with each bubble popping more and more people get a rude awakening. Some are able to jump on another bubble and keep the gravy train going, but might be left in the dust in the next one and so on.
If anyone was conned, it's primarily the younger engineers who started their career in those bubbles, were never exposed to the financial realities or even forced to think about it, and now get a very unpleasant wake up call.
You may disagree with my argument - but in that case I suggest taking a short position on Bending Spoons & their competitors who appear to be making the same argument and putting their money where their mouth is.
You've fully retreated:
You started by calling engineers "deadweight" that Bending Spoons correctly cuts. Now they're victims who were "conned" and given "illusions" and deserve sympathy for their "unpleasant wake up call."
These are incompatible framings. Deadweight is culpable. Victims of a con aren't. Which is it?
> I suggest taking a short position on Bending Spoons
Strip-mining is often profitable. That's not the disagreement. The disagreement is whether "profitable" validates your original framing that the workers being cut are deadweight rather than, by your new admission, ordinary people who were lied to by the actual decision-makers.
Note also the lack of understanding of finance, coupled to parroting pop-finance, continues. You're trying valiantly to hammer phrases we all know, into meanings they don't have. They sound epic, and are very "law of nature" feeling. I understand the appeal. Anyways, you cannot short a company without a stock.
I guess that was poor framing on my part from the beginning; I used the term deadweight meaning overhead that can be cut, not implying culpability one way or another.
Which positions are culpable or victims is besides the point here (I have other comments on ZIRP related threads if you are interested, where I do make direct accusations).
> ordinary people who were lied to by the actual decision-makers
Were they truly lied to? They got paid for years of service. Now whether they got lied to by Bending Spoons denying there will be layoffs I don't know (or whether the lie matters - for all we know they got a fair severance package, at least in places where that is legally mandated?).
But for those who started their career in the "good days", I would say they got misled by an environment that rewarded raw engineering without concern for the business outcome of said engineering (and often rewarded over engineering in fundamentally unsustainable businesses). Now the business outcome is suddenly becoming the most important thing and these people are taken by surprise.
---
Now it's clear you have some kind of beef with me; I'm either talking complete shit, or I struck a nerve. Maybe a bit of both. Either way I will not pursue this conversation further - best of luck!
I don't have some kind of beef with you. I react personally too in these long discussions, don't begrudge you the impression.
Just saw what I thought was youth, but it was a fellow older fellow*, so chased the interlocution more than I usually would because I was curious and wanted to make sure there wasn't insight I had missed and you were speaking loosely (as is normal, we are not robots)
re: motivation, I took a lot of pride in not taking money back in prime ZIRP, early-mid 2010s and felt it was vindicated by what I saw happen to competitors.
What I saw was proto-"Bending Spoons" behavior. Frankly, Bending Spoons seems ethical and right-headed at its face. i.e. after 30 seconds with their website. but what do I know.
What I saw was private equity rollup iPad-based point of sale software who couldn't justify another round, and let the business owners using their point of sale systems flounder until they got the energy to switch. Explicitly. the rug pull wasn't just on engineering or further development of the system, it was support too. That might sound stupid (who needs support w/software?), but its necessary for point of sale due to credit card processing. Multiple companies, same playbook.
Cheers & apologies, I went too far, I left you feeling like it was a grudge.
FWIW it's also important to me because I want a fellow wide-eyed college-dropout-waiter soaking in HN from a small town to know VCs involved in these messes will continue acting as they have post ZIRP, as you've established.
* via your HN profile, not stalking off site or based on username
No worries, all good! It's difficult to convey emotions and tone online.
> it was a fellow older fellow
~11 years professional experience only - still got plenty to learn, but unfortunately seen enough shit to be cynical. Started out starry-eyed in the middle of the ZIRP era ~2015 and made some salary off it but no exit money, though something felt off and I never understood the over-engineering at the time.
Then as I gained experience, switched to consulting to boost my earnings and looking back at it my (admittedly very jaded) opinion is that a lot of that "engineering" was performative bullshit enabled by cheap money, which continues to be the case in some verticals (blockchain; now AI).
Senior engineers of the time would've likely known it was bullshit and were just happy to play with new tech while subsidized by VCs, but unfortunately this "quiet part" was never said out loud to those who started their careers during this period and for whom their only experience of technology was through this distorted lens of cheap money and no financial/business pressures.
The result is a lot of very senior people tech-wise but with little exposure to the business side of their craft, who the readjustment hit like a brick wall. The fact my statement about maintaining a (well-built) product requiring much less manpower than building it is apparently controversial suggests many people have yet to experience this brick wall.
But for those who looked into the financials, the selling out and subsequent layoffs should've come at no surprise - it was never sustainable to keep paying those tech salaries perpetually. The same thing happened to blockchain/web3/crypto, and the same will eventually happen to AI.
There is still and will always be money to be made in technology, but it will be made by applying technology to business problems and approaching every problem as "how much money does this make/save and how big of a cut I can negotiate". Permanent employment is just letting someone else do said negotiation on your behalf in exchange for a promise of stability - well, turns out when the times are tough they don't have to keep that promise: plan accordingly.
(btw, this ZIRP-era distortion was not limited to technical roles - there were plenty of "startup founders" and executive roles too who got there because of the cheap money rather than earning said position through demonstrated skill - unsurprisingly, a lot of those people have since quietly transitioned back to the rank & file once the money fueling their little startup escapade ran out)
If you build a house you don't keep the builders on payroll once it's built to keep "building" it - you may need maintenance staff but that's it
A very analytical, technological, short-sighted view of things. But not necessarily how the customers think.
For many customers, a company that isn't growing is shrinking. If a company isn't willing to invest in growth, that's a red flag.
I mentioned the Vimeo thing in a meeting this morning, and the head of Communications immediately said he's going to start looking for alternatives.
You can make all the analogies and excuses you like, but look at Vimeo's sister properties (Evernote, etc.) Are they better off since they were gutted? Are they delivering more value to the customers, or just funneling money to the parent company and its investors?
I think a better analogy is some big Wall Street investment company buying up nursing homes, and making lots of noises about "efficiency." That never works out well for the patients/customers. Only for the company.
> the head of Communications immediately said he's going to start looking for alternatives.
He's gonna start looking for alternatives and then most likely find nothing that matches the featureset vs price of the current solution + the cost of switching, and the matter will quickly disappear.
Last time AWS or Cloudflare was down a lot of noise was made and a lot of people started looking for alternatives too - and everyone forgot about it a week later.
> Only for the company.
Yes, the point of business is to make profit, not to be a charity. Bending Spoons believes they can extract enough profit off Vimeo to justify the purchase price, either by reducing expenses, raising prices or both. This may still be palatable to the customers if they don't have any better option.
Yes, the point of business is to make profit, not to be a charity.
No one said it was. Where do you see that in this thread?
Bending Spoons believes they can extract enough profit off Vimeo to justify the purchase price, either by reducing expenses, raising prices or both. This may still be palatable to the customers if they don't have any better option.
Just listen to yourself. "Extract enough profit," "raising prices," and ending with You don't like it, too bad. You sound like the taxi industry before Uber.
This the type of thinking that gave us Windows 11, Adobe, and every other piece of technology that started good, but became crap.
It's also the reason new companies suddenly show up and eat the incumbent's lunch. Happens every day.
I'm glad I don't work for you or your company. I have pride in my work. I wouldn't want to be just another tool to "extract" things from my customers because "they don't have any better option."
> No one said it was.
Fair enough, a minority of businesses are run as public benefit corporations. But the vast majority is ran to generate profit. Bending Spoons especially.
> I wouldn't want to be just another tool to "extract" things from my customers
I assume you're independently wealthy and acquired said wealth from a generous donor who gave it to you with no expectations in return?
Because otherwise we're all "extracting" something.
I take pride in my work too and I believe the prices I charge for my services are fair - but nevertheless if I gave the choice to my clients between paying me for those services or getting them for free, they'd prefer free.
> This the type of thinking that gave us Windows 11
What's giving us enshittification and the terrible quality of software nowadays is the lack of healthy competition, because of lacking anti-trust enforcement and adversarial interoperability being effectively illegal. Companies thus take their customers hostage and raise prices/decrease quality.
Ideally we'd just make competition in tech a reality again which would put a limit on enshittification.
I'd question why your "head of Communications" isn't already aware of alternative vendors for important pieces of their domain. After all, companies go out of business, get bought out, change pricing all the time. And Vimeo was bought out months ago - this person didn't start researching then, just in case? I'd suggest the CEO start "looking for alternatives" for this employee.
I'd question why your "head of Communications" isn't already aware of alternative vendors for important pieces of their domain.
I don't like the guy, so it's not like me to defend him, but perhaps because he's busy being the head of the Communications department, instead of a tech nerd?
My company produces thousands of pieces of communication each year in many different forms. Video is a small part of what his department does, so you make the false assumption that this is an "important piece" of his domain.
I wouldn't be surprised to learn he doesn't have some internal cronjob to constantly search for alternatives to every single one of the (probably hundreds) of vendors we have around the world.
It's very weird that you feel that you're in a position to second-guess a person you never met, in a job you've never done, in a company you don't know, in an industry you also don't know. That's Olympic-level hubris.
You said: I mentioned the Vimeo thing in a meeting this morning, and the head of Communications immediately said he's going to start looking for alternatives.
And now you're saying he might have a "cronjob" constantly searching for alternatives? Well then your original point is neutered, he's not going to "start" since he's already been looking.
And video is only a small part? Not an "important piece"? Well then why should Vimeo's owners manage their company based upon what low-level users think? Again, you've minimized the point of your original post to irrelevancy.
The biggest piece of evidence for this worldview is the Twitter acquisition. A lot of people were very confident that it would quickly fall over after mass layoffs. That turned out not to be the case: the site can be kept running on a much lower staff.
They've not really been able to add new features to the backend, but on the other hand: old @Jack Dorsey Twitter was so bad about this that there were memes ("likes are now florps"). And the features they have added (indecent image autogeneration) have caused as much brand damage in Europe as the Nazi salute. Yet the site continues to stay up almost all the time.
(I don't think ZIRP is where the blame should lie, though. It's SaaS, which turns software into rentierism rather than purchase)
> “Tech was an outlier in this case because ZIRP allowed companies to retain full engineering teams to keep "engineering" the product even once product-market-fit has been achieved…”
Do you include visual design/UI design in the engineering category? In the situation you describe does a completed product continue evolving visually, or does the design stay fixed, and gets bug fixes and such?
Buildings are built according to a standard, legal code, with architectural drawings, inspections, standard components and dimensions, etc. The people who work on them are trained and certified in specific practices with specific tools and materials, and follow rigid guidelines. Most jobs are the same tools, same parts, same basic construction, same tasks, there are plans available, and most of the time it was inspected so it was done mostly in a way everyone understands and expects. Maintenance is very minimal, on the order of years, and it lasts decades if not centuries.
Software is more like industrial manufacturing. Besides the high cost of the machinery, if the machines stop working (which they do occasionally) you stop producing product, so you need someone on staff who is familiar with them to fix them. A friend of mine is one of several "night staff" at Hershey's that just sit there twiddling their thumbs until a candy machine stops working at 4am.
> you need someone on staff who is familiar with them to fix them
But that maintenance headcount is much lower than the headcount necessary to build that machine. The same should be the case in tech - once the product is built and the groundwork laid, ongoing maintenance and minor alterations should not require anywhere near the headcount it took to build.
I agree you don't need a large software engineering headcount for maintenance. But there's multiple factors that change the estimate:
Now, in a few cases, you can cheat. Wordpress requires less maintenance if you rely on canned plugins. But security patching is constant, and eventually you have to upgrade the entire thing as old plugins and core version go EOL. Managed instances help a lot here but still break from upstream changes. And as browsers change, so do the frontend software's compatibility.The more complex software you depend on, the more expertise you need to fix things. If your usage keeps growing, but your app wasn't designed to scale ("just use Postgres" is not a scaling solution; some things even buying more hardware won't fix), now you need someone to bust open walls and add extensions to the building. That's a lot more dangerous with software contractors than the original engineers.
If your entire stack and app is bespoke, and you run your own VMs, or god forbid, run your own metal, it's a much larger maintenance burden (to keep it running well; lots of people limp along for years on broken equipment and software, at high risk to the business)
If we actually did build software more like we build buildings, we could bring in contractors for short stints to do either maintenance or new construction. But the complexity of current software engineering trends makes that fail a lot of the time.
Replying here because GP makes a good distinction, and your point still holds.
I would point out that there are a few alternate models:
1) You use the maintenance headcount to build, and you just build that much slower.
2) You have an org that wants to stay the same size and move from project to project. In that case, some subset of your staff, are, at any one time, revisiting old projects for updates/maintenance, and some other portion are working on building a new thing. This is probably the strongest paradigm, because you can leverage common platforms between solutions.
Unfortunately, of course, either of this is at odds with the current approach to business/capital, in which once an opportunity emerges, everything is thrown at it as quickly as possible.
why do you think the previous management team couldn't pull an Elon and fire 80% of the engineering staff themselves? why they needed an external leadership to take over and do it?
Part that i can't wrap my head around was at least in case of twitter, it was a hostile take over. In case of Vimeo, it didn't look hostile at all.
Twitter was not a hostile takeover.
https://en.wikipedia.org/wiki/Acquisition_of_Twitter_by_Elon...
> Twitter's board publicly and unanimously accepted the buyout offer for $44 billion
Maybe they could have. But they have 1.4 billion reasons to just walk away and either retire or try something else instead.
I wonder if existing management had a lot of social ties to the existing workforce so that they couldn't easily get away doing that themselves without a big hit to their reputation.
Letting someone else do the dirty work allows them to disassociate themselves from the (predictable) outcome and frame it as just business.
I don't think you need ZIRP or even VC to have successful software companies that reinvest in features. You need a low marginal cost of manufacturing, aka the floppy disk.
Yep, and then CDROMs really bumped it up to the next level for Microsoft.
Pop music CD's had been popular for years before data CDROMs became available and more common.
Stars like Michael Jackson were raking in the bucks and their record companies even more.
Then by the mid '90's Windows was too sizable and unwieldy for most people to install from floppy any more, and consumer PCs started having CD reader/players standard.
Microsoft CDs started flying off the shelf at 10x the retail price the record companies were charging for music CD's.
I don't think people where simply laid-off here, but replaced by the in-house developers and technologies of the platform of BS.
I see a lot of negative comments here on HN, and I partly agree, but no one is recognizing here their try to optimize.
the house is a bad analogy
the more appropriate analogy is a car company. They still need engineers because they need to keep coming out with new model and technology in order to remain competitive. Ford didn't fire its engineering team once it had built a car.
But they don't reinvent the wheel at every new car.
From "Vimeo to be acquired by Bending Spoons in $1.38B all-cash deal" (https://techcrunch.com/2025/09/10/vimeo-to-be-acquired-by-be...):
> Bending Spoons has a pattern of acquiring companies, then laying off staff and cutting features. For example, Bending Spoons acquired note-taking and task management app Evernote in 2022, after which the company laid off most of its U.S. and Chile staff and moved operations to Europe in 2023. Evernote then shut down the Linux and older legacy versions of the app, and then proceeded to place heavy restrictions on the app’s free tier in 2024.
> In another example, Bending Spoons acquired WeTransfer in July 2024 and then laid off 75% of its staff a few weeks after. A couple months later, WeTransfer began limiting free users to 10 transfers per month.
I don't understand this model. Such significant layoffs would indicate that there is no real appetite for expansion or growth.
Their goal might be be to acquire, dramatically cut costs, and then run the product for as long as they can at a profit before breaking it down and selling it off (or hope for a buyout by a bigger player.) But that wouldn't make sense — customers of a depreciating SaaS product surely churn after a 1-3 years, so they wouldn't make enough of a return from their existing customers to justify the investment...
Yeah this is what I think Bending Spoons does, mostly based on the Evernote situation.
Product has paying users and it's in a "complete" state. Cut costs to optimize profit for a bit and hope not everyone leaves.
In the case of Evernote, it's probably really hard to get 10 year users off of it at this point, so they can double subscriptions and they're locked in. My assumption is that there's a serious amount of people that go "eh" and just deal with the cost increase and stagnated features.
It was like that with WeTransfer too. Fine company that had been profitable for years, but with little hope of getting ever 10x bigger again. I used to work there and had already left by the time of the acquisition, but all the old colleagues I've spoken to said the same.
The main business was throwing off gobs of money and there were SO MANY failed projects to try and find new revenue streams. Everyone who was not being pushed by the PE owners could see that they would never account to even 1% of the revenues of the main product. It was only a matter of time before someone came in, said "the main business is fine as is" and fired the people who were involved in the moonshots then sat back and raked in the cash. Sure, it will probably not last forever. But if it brings in millions per year for 15-20 years until the company dies, then that is probably an outcome Bending Spoons is fine with.
For a hosting space like Vimeo, I'd be surprised if this gave them 5 years. And remember, they acquired Vimeo for over a billion dollars.
This isn't like some B2C 5-10 dollar a month service. Video hosting is notoriously expensive and paying clients will quickly see other alternatives if they see smoke. These are already people with specialized needs that the main market leader (Youtube) cannot fulfill. They are "active", so to speak.
> These are already people with specialized needs that the main market leader (Youtube) cannot fulfill.
Isn't this just a bigger reason why these people won't leave? Assuming the acquirer isn't dumb enough to remove the core benefit that comes from their highest paying customers, they will keep providing those, and those customers won't churn. And I think this is a safe assumption, considering it's the primary goal and focus of the people at the acquirer.
My TLDR response here would be this: Vimeo isn't Evernote and people are paying a lot more to expect more. The nature of this means that smaller bits of "product rot" will push them away faster than what a consumer would tolerate. These are already people who needed to deliberately avoid Youtube, so they aren't afraid to migrate again if needed.
There's also a lot more competition with Vimeo than there is with YouTube. So options exist to find.
----
But I'll break down my thoughts further. I'm familiar with the scene (a lot of artists use Vimeo for their portfolios, as well as working with clients on NDA content), but not intimate. So I'd love someone for me to call me out here. But:
There's 2 lenses here. Your lens implies Vimeo is the best service in this niche space, that reducing down the staff count to a skeleton crew will keep it as the most competitive option, and that as long as this isn't disrupted that it'll be business as usual. And we'll be charitable and assume this doesn't enshittify. Those are all valid points. I'm much less charitable, but I can still work in this lens for the sake of argument.
The lens I'm looking in is more at the type of person using Vimeo, not the type of business Vimeo runs. Compare this to Evernote. It's a lot closer to Twitter or Facebook, where remaining users will use it simply because "it's familiar" more than for any competitive edge. It has everything you need, and even if costs rise, we're still talking about one lunch outing per month. It's a "sticky" product benefiting from previous goodwill and marketing.
The people on Vimeo aren't "sticky". They are closer to the type of person who leaves Windows for Linux because Microsoft keeps pissing then off. In fact it's more like they are Linux users who jump around from distro to distro because they already forsook the market leader. They are "actively" on the move and aware of the tools they use. Given that Vimeo is a highly premium service when you use Enterprise, you need to be active. You don't want to be on a sinking ship and have your work crash with it.
So I see two roads here. Some users will stay "stuck" because maybe nothing else does compared to Vimeo. Or because some larger pipeline relies on Vimeo and it's beyond their control. Then some users will be either leaving to another service, or actively keeping an eye out for competitors in the near future. That's what I see as "different" here.
Now, taking my charitable lens off: I do think there will be a lot of small issues pushing people off, and then a few huge ones. Small things like site performance degrading as they scale back server, and worse support as they slash labor. Then the larger things will truly push people, like a price hike, change in monetization models, or failing to honor any deals made pre-bending spoons. Or even a huge data leak. Those things, big and little, break the foundation of a trusted business.
Since Vimeo owns the customer billing relationship in a lot of their whitelabel B2B business, migration would be a pain, especially when compounded by a massive amount of data needing to be re-ingested. I think those customers will tolerate a reasonable amount of rot before starting to move and that the timescales would be long.
Totally reasonable take, thanks for going in depth.
I mean, if your argument is, "Bending Spoons made a bad investment," then sure, okay. That's not implausible! Companies make bad investments.
But I don't really see what overall lessons there are here.
>But I don't really see what overall lessons there are here.
So many chains to keep up with. There wasn't really a lesson here. Just "Vimeo is not Evernote"?
My wider lesson unrelated to this chain is that US at will employnent sucks and we need to overhaul it. You don't create a trusting career by treating employees like toys to discard.
The US has enriched a vastly larger number of software engineers through at will employment that Europe has through making it very hard to fire people who aren't adding value.
1. I don't know how that's relevant to my argument at all. This is just "you criticize society, yet you participate in it" dismissal.
2. This is like saying "Asia has better rice because it employs more rice makers than the US". Besides being dubious in truth, that also isn't a good measurement for "enrichment" nor "quality". It's just saying that there's more money being put into the industry in this country than another counry's industry.
3. Even if I took this as truth, this didnt happen overnight. I worry about how Gen Z will be "enriched" in this model, and saying "but millenials/Gen X had great careers" is condescending to Gen Z at best. The rules changed over their careers, and we're still using the old rules to talk about how good we have it. Or had it. Gen Z doesn't know what those rules are anymore, so there's nothing to fall in love with.
The point for me is that "a trusting career" costs far more than it's worth. I would much rather make 3x as much in America with less job security.
That's fine, but different people have different risk tolerances and preferences. There's many people who would never want to emigrate to the USA, and many Americans who emigrate abroad. There's no one country that fits all personalities.
Agreed, I’m responding to someone who is criticizing the American way of doing it, so I’m explaining the tradeoffs as I see them.
And honestly this is probably fine. If the main business can't grow and there have been a few years of attempts to produce complementary businesses with no success, that's a good sign that the business should be moved into a "return money to owners" model.
Sadly, "return money to owners" ends more like the owner selling off the company and leaving all the workers under them in freefall. And people wonder why loyalty is dead.
Well, the workers already got paid for their time; the owner didn't for their time and (more importantly) risk.
No one wonders why loyalty is dead.
The owner got a big pay package from the sale on top of usually being one of the more highly compensated employees at such companies. What do you mean by "the owner didn't get paid"?
>No one wonders why loyalty is dead.
I see you missed the recent narrative of "Gen Z is lazy" and "most managers avoid hiring Gen Z" out there. I assure you many managers are baffled, bit blame the (relative) children instead of seeing how work culture has shifted since they were that age
Yes, the owners were paid by the sale. The argument by other people was that the sale shouldn't happen, or vice versa that the sale should happen only to people who were committed to continuing to spend the company's money on supporting employees who are stipulated to not be adding much value (and, thus, are not willing to pay much for the company).
Guys, I totally get it. Nobody likes to be laid off. I was laid off a month ago. But the money that is being soaked up by employee who are, again, stipulated to be not doing anything productive goes somewhere else. This may be a tragedy for an individual person, but it's good for society overall.
> the owners were paid by the sale.
the owners didn't have shares in their company? they weren't paid for their labor? They only get money when they sell off and are working for free out of a labor of love until then?
>The argument by other people was that the sale shouldn't happen...
I guess it wasn't in this chain, but my argument was focused on the human element. I don't care if the owners got a trillion dollars and never shared. I don't think it's right to be able to lie to your employees only to let them go with no notice a few months later.
You're never going to convince me that "it's good for society" to prop up livliehoods on convinient lies and instability. That's how suddenly everyone starts talking less about Star Trek and more about Luigi.
> the owners didn't have shares in their company
The shares in the company convert to money when they sell the company. They're not intrinsically valuable.
The founders are probably not the owners of a large majority of the business. Most of the owners are not drawing any salary.
Look, lying is bad sure. It would be better if they had been honest in November. But nobody here is actually arguing that the layoffs are fine, they're only mad about the comms.
>Most of the owners are not drawing any salary.
If they are founders and they chose to leave, that's their freedom to do so. Just like any employee you don't get a salary for leaving just because you used to work there.
if you're an owner who bought in, you already got your money. You got a steady profit from sitting there and operating a business at best. At worst you made a bad business decision. You're not owed profit.
So yes, they are both paid, or gambled and had a bad opportunity cost. That's life. I don't see it as justification for them to "deserve" their sale, even if it's legally their call.
>But nobody here is actually arguing that the layoffs are fine, they're only mad about the comms.
Many people in this discussion are in fact arguing that the layoffs are fine. to paraphrase a few
> "It's obvious if you know who Bending Spoons is"
> "That's at-will employment, it's fair"
> "they have to run a business"
> "most of the owners are not drawing any salary"
So yes, even if it's against their best interests there are still so many beholden to defend billionaires. And that is why I asset seemingly obvious points. What's your argument here again?
Just like any employee you don't get a salary for leaving just because you used to work there.
Yeah, and also just like any employee, you don't get the benefits of ownership just because you were paid to work on something.
This is correct. You're buying a cashflow. Bending Spoons has optimized their model for very specific types of cashflow enterprises to aggregate into their portfolio.
I use Harvest to track hours and expenses and to invoice my customers. Bending Spoons apparently bought them a while ago and just eliminated the shell company around Harvest.
Based on my experience with Evernote, I don't trust Bending Spoons, and I'm wondering if I should look for a different time-tracking and invoicing system.
I've been in the same boat as you and replaced it last year but still pay for harvest (grandfathered pricing) until I can be sure I don't need it. I'm almost up to renewal and haven't used it at all since trying app.solidtime.io
I'll be honest it's not as good as harvest. The mac app is a bit buggy, it's not as easy to add manual time, and you need to pay for pdf export. But having said that I've found the free version to cover 90% of my use of the paid version of harvest
I use Harvest for my freelance invoicing and started seeing the huge notice at the top of the app and was wondering how this was going to impact my stuff going forward. I'm also very leery having gone through a horrible Evernote experience.
If anybody has any good alternatives, I'm all ears.
Yes.
It would be nice if there were a common way for essentially feature-complete SaaS businesses to carry on and maintain some expected level of quality, security updates, and support without endless pressure to expand revenue or slash costs.
A lot of the pressure to expand revenue comes from within thanks to the flaws of permanent employment - you hired permanent employees at a discount compared to the equivalent contractor/temporary workforce in exchange for a promise of perpetual employment. These people will thus do their best to ensure their perpetual employment (they will never say "hey I think we've finished building your product, now you can lay us off to make profit").
You can of course sidestep that and use contractors for the initial build out - plenty of agencies and freelancers will give you a quote with various terms. It'll cost way more in the short term because you're essentially paying upfront the years of salary they would otherwise earn building the same thing as permanent employees, but at least it's an upfront, honest transaction with no expectation of loyalty. You can then hire a permanent skeleton crew for the continuous upkeep.
Want a turnkey Vimeo you can deploy on a cloud or truckloads of servers you can just rack up in a colo? If you have a spare 1.4B laying around, I'm sure that can be arranged.
Terrible for those laid off but perhaps not for Evernote customers if it means there isn’t unwelcome feature creep.
Been a paiyng Evernote customer since its launch. I unsubscribed at the beginning of 2025 after 7/8 years of shitty releases, not fixing old bugs, and new useless features.
I don't user Evernote very often, but I have a bunch of stuff stored in there and use it basically in a read-only mode. For a long time I was able to get the $36 / year plan which I felt pretty good about. It was a great app and service which I didn't use very much, so that felt like a fair price and I felt good about supporting them at that level. Basically every time I opened Evernote, I was paying $2.
But then the price tripled and for me, it's too much. I'll pay $2 per session, but not $5.
I remember their CEO (Phil Libin I think) on their podcast explaining how they were building a 100 year company. I really wanted to believe that.
I use Obsidian now and like it, but it feels like they are going down the same path. They keep adding features that don't really fit the original editor-for-a-folder-of-markdown-files. I wish they would stop.
It's a bummer but the feature treadmill seems inescapable. Bending Spoons will probably be able to buy Obsidian for a very nice price in a few years and the Obsidian founders will do very well.
If everyone gets salaries and equity is paid for then everyone's done great. And then we can build another one, or an open source equivalent once all the money's been spent researching useful features, and then we're done.
I wouldn't classify a small number of people with equity scoring big and millions of users losing out as everyone doing great.
The users will have done worse had the company simply closed, though. I think that's generally the alternative.
Just unmitigated bug and software rot creep.
It's worse. When a company like this is "mature", they don't try to appeal to new users. They instead squeeze what they can out of the existing user base, because that user base is probably already dying off. This isn't about attaining a steady state business, its about seeing how much of the toothpaste you can still squeeze out the bottle before it crusts up.
This practice is derogatorily called "vulture capitalism" for a reason. I hope the remaining engineers are either lining up for retirement or networking around for their next gig.
> Their goal might be be to acquire, dramatically cut costs, and then run the product for as long as they can at a profit before breaking it down and selling it off
In the 80's people who did this were known as "corperate raiders". Nowadays it's just called business.
I've heard vulture capitalist used to refer to that too
"corporate raiders" are a definitely real thing.
That usually means stripping the company for parts. Bending Spoons is just trying to run the company sustainably.
Vimeo employed somewhere north of a thousand people a year ago with 28% being in the engineering team (according to random google results - this isn't an area I have personal knowledge of). If they dropped from around 300 people to 15 that sounds like gutting - not trimming.
They will be hiring up but not the same people. Bending Spoons tends to replace high silicon valley wages with high Italy wages which is a considerable saving.
This is why I can't take any anti-immigration sentiments seriously in this country. An american founded company runs a business for 20 years, sells it off overseas, and the new owners kick all Americans out of the equation.
Response from America: "well that's just business, I guess". It was never about preserving American labor.
If the company was profitable they wouldn't have needed to sell. It was always living on borrowed time. If a US owner bought it they'd have done exactly the same thing (layoffs) albeit possibly with new jobs in a different state than country.
>If the company was profitable they wouldn't have needed to sell.
And it's always the workers who pays the price, not the businessman. Does that see fair?
>If a US owner bought it they'd have done exactly the same thing (layoffs) albeit possibly with new jobs in a different state than country.
That'd be unfortunate, but it still means jobs are created in the US. It also gives he opportunity (slim) to have people move in the country. Moving the jobs overseas, not quite as mobile.
But yes, the big issue here is the lack of decorum in how we recklessly cut jobs here. This isn't how most 1st world coutnries work.
Vimeo's stock lost 90% of value after its IPO. Plenty of investors and businessmen paid the price.
Typical bean counters, firing all the people with institutional knowledge up front, and then hoping their cheaper labor can figure things out.
Meanwhile, the users are the ones who lose out. Classic.
It sounds like they're trying to extract as much money as possible from a SaaS subscription service that's no longer actually paying any devs.
From my perspective as a one-time (but no longer) paying user of evernote - WTF am I paying for monthly if not to support a dev team?
Seriously - I get that there are infra costs for some of the services, and I wouldn't mind paying those costs plus a reasonable upcharge, but I'm sure as fuck not going to pay a company $100+ a year subscription to store under a GB of data.
So now I host bookstack and I pay backblaze ~$0.22/m to back up all my notes, which is much closer to real costs for these services if they're not under development.
Genuine question, why not use a free Git service or something
I pay for Sourcehut now, but until recently I was using a free private GitHub account to sync my notes in Obsidian. It works fine and cost me nothing (at least nominally).
The honest answer is because I backup a large number of other things to backblaze anyways.
I went on a mission about 5 years ago to essentially stop paying for SaaS services if there was an opensource alternative available that I could self host.
I have old machines lying around anyways since I was upgrading about every 5 years for gaming. So I have a 5 node k8s cluster in my basement serving about 20 different services that I use, and I no longer pay for basically any subscription software.
Git is fine for text content, (hell, I have about 25 personal repos on github anyways, although speaking of... most are mirrored to a local gitea instance) but it's not a great solution for backing up DBs, binary data, media, photos, etc...
Eventually - I'll likely replace backblaze with a NAS at a family member's house, but for now - it's very cheap and the billing is fair (usage based billing, not the exorbitant monthly fees most SaaS services charge).
---
Plus - I really like the flexibility of web based services. I don't have to remember to sync anything with bookstack, I just hit 'https://bookstack.[mydomain]' in a browser from any machine I want - Friends house? works. Public library? works. Wife's phone? works. Work laptop? works. etc... you get the idea.
Even after accounting for the initial outlay for a large NAS and my extra power consumption - I broke even in just under 3 years self hosting. Turns out SaaS is sorta a scam if you're technically capable.
And absolutely more power to ya for finding your own alternative solution!
Totally fair.
I've heard that Mercurial has competent binary diffing, so I might at some point try using that to sync my Obsidian stuff.
Anyway, it's not like 22 cents a month is going to bankrupt you so I am certainly not criticizing, I was just curious.
Corporate raiders is a bit of a different concept. That implies a hostile takeover. Like aggressively buying up shares in order acquire a majority stake and set company policy against the wishes of other insiders.
Bending Spoons is what we'd call vulture capitalists which have and continue to exist. Basically they buy weakening businesses and carve them up for parts, selling anything of value and squeezing max revenue of whatever is left.
> Basically they buy weakening businesses and carve them up for parts, selling anything of value and squeezing max revenue of whatever is left.
People say this like it's a bad thing, but without "vulture capitalists", struggling companies would default and banks would attempt to do the same, except they are much worse at it and even more people would lose their jobs.
What's hard to understand? They switch the companies from growth (no matter the cost) to revenue extraction (even if it will eventually fade)
Minimum viable cost of keeping the lights on. And sometimes they even compromise a little, "let's spend a tiny bit more and see how much growth we can get from that"
Not the concept, how it can be profitable given the price of their acquisitions.
HN: VC is a cancer, businesses don't need to grow forever at all costs, products can be finished, what we need is sustainable small companies
Also HN: No, not like that
If your comment is referring to the bending spoons business model, it's worth pointing out they are not VC, they are private equity.
If your comment is referring to the software company's exiting to provide a return to shareholders, that happens all the time whether it's venture-backed or privately owned. The owners of privately held bootstrapped companies still want an exit one day too.
As an open source software engineer who is now a venture capital investor, respectfully, I think your beef is with capitalism, not with the institutional investors.
Not in the startup world beyond what I pick up on HN, but this distinction was helpful. My mental model going forward: - If a company is still validating the business model and optimizing for rapid growth, it’s typically a Venture Capitalist (VC) fit. - If a company is already established and the play is to improve operations, scale, or restructure (often involving a change of control), it’s typically a Private Equity (PE) fit.
Publicly listed companies buying businesses would be a third “fit”.
Reminder that restructure often means a company working just fine, but whose assets outstrip what PE can buy it for, so they strip it to the bones. Or they leverage it with debt against assets then pay that money to themselves for consulting, account/hr services that they force the company to outsource to other PE companies. Nothing is 'created' through this process, no value created/added, nor it is healthy capitalism as the company could have continued fine without this added leveraged debt that was purely used to profit PE.
Alright, so is vimeo finished product then?
Why not come out and say this?
Also another thing but other comment https://news.ycombinator.com/item?id=46707699#46709164 points out how Vimeo wants to replace SV engineers with Italian engineers to save money.
They are a first and foremost private equity company, Don't forget. There's no loyalty to any group.
They don't replace engineers with engineers, they just put enough staff in place to leave the machine working.
And yes, they in-house the engineering part, but the fact they are Italian is just because Bending Spoons is Italian and their offices are in Milan.
Bending Spoons pays its own engineers very well, an entry level junior position starts at 75k+ euros, which in Italy is a senior+ engineer salary.
The Bending Spoons business model is right out of the private equity playbook. Buy a business with good revenue, cut cost to turn this into a consistent revenue stream, generate annual returns.
This is not like making a small 20 person self funded company.
Imagine a world where you can't complain if something is directionally correct in what you want done.
Me: can you take out the trash? My kid: dumps trash on the front lawn.
Me: people are speeding a lot, can we do something about it? Cops: shoots anyone speeding in the face.
But I guess I can't say anything about it, because they're just doing what I want!
It shouldn't be surprising that different people on a discussion site have different opinions about the same thing.
Comments like the above one refer to community vibes, the types of comments that will get you lots of praise/upvotes.
So while individuals have different beliefs, the "average expected top comment" for communities like HN is usually pretty predictable, and hence the cognitive dissonance of the community on the whole can be called out.
It’s almost as if HN were a community of voices instead of just one…
The Goomba Fallacy strikes once again
Thanks for sharing the name of the phenomenon! I was not aware of it before.
This fallacy's pretty cool and first time I Heard of it!
Do you know other fallacies like this which are less known but as interesting (that you or others might know of) probably?
Yes, we're are all individuals! Yes, we're all different!
https://www.youtube.com/watch?v=QereR0CViMY
(I'm not.)
There are now more private equity funds in the USA than McDonalds. The maximum wealth extraction of every single thing in people's lives is not viable for a continuing healthy society.
https://www.cnbc.com/2025/11/05/private-equity-consolidation...
An important clarification if you're not familiar with the industry: A PE firm will often have multiple funds.
There are not more PE firms than McDonalds in the USA.
What if there isn't a feasible path for expansion and growth? Vimeo already has contracting revenue, it's either in the maturity or decline phase.
Some customers will churn, some will stay, Bending Spoons are the masters of this model so will have made an assumption on how revenue will change across the next 5-10 years+, but I would assume that they aren't forecasting extreme growth, and instead are calculating that net profit can be changed from c$30m to c$139m within existing revenue, so if they can keep revenue at/near current levels without growth, they can end up with a much more profitable business.
Bear in mind that same revenue doesn't necessarily mean the same number of customers - it can also mean raising prices and having less customers. Bending Spoons might estimate that if they double prices, half their customers might leave - this would still be BRILLIANT for profit, as while revenue would stay the same, some costs would half, and thus profit might jump from c$140m to c$250m based on some napkin math!
For example, they bought the German hiking and cycling app Komoot. It's a mature app in terms of functionality, with a stable user base. There's little chance of hypergrowth with this type of app. It's also complicated to switch apps because transferring routes, collections, photos, etc. to another service is difficult.
They laid off 90% of the teams. They migrated the app to their infrastructure to pool costs. Since then, there has been no further development of the service.
They are cost killers of the internet.
It's also complicated to switch apps because transferring routes, collections, photos, etc. to another service is difficult.
Not really, sync everything through Strava, and then drop whichever service you don't want. Basically any bike ride I've done in the past decade is on 3+ services because they all sync.
I think by routes he means the trails database, not user activity
Oh I can do it but I am not really representative of the average user.
Plus I have a lot of points of interest, note, picture, that I could request via gdpr but not easy to reuse and couldn't be imported into Strava.
Strava isn't better than Komoot on this regard.
> Since then, there has been no further development of the service.
That's not true, the website and app both got a major redesign after acquisition.
It is mainly cosmetic and probably due to sharing resources (web template) with their other products. There are no new features.
What I understand from listening to the management from various podcasts, it was a mix of shipping the most minimum impactful features with the leanest product team needed and then jacking up the price every year for the people that can't move away from these products.
It's called butt cigar investing or corporate raiding.
They acquire startups and companies without a huge growth potential but modest cash flow and little profits.
They cut the operating expenses to the minimum and jack up the prices to sky rocket profits till their mathematical models will tell them they will profit on the investment.
Rinse and repeat.
Have there been any serious legal efforts to make this less profitable? It's very clearly detrimental to society.
Why would it be detrimental to society? Many companies have developed all the products they're likely to ever develop, so why would you maintain the same level of operational costs as when you expected growth? There's no guarantee that the prices charged before the acquisition were sustainable either.
They don't just maintain these products, they enshittify them to extract the maximum possible profit from captive users, until someone else comes in and builds everything from scratch all over again.
This is crazy inefficient yet it's not captured in our economic theories, so we're essentially blind to it.
Not much you can do. The alternative is bankruptcy that does a similar thing to workers. But it at least doesn't let the company make blatant lies of a PR statement.
The main thing to do is make it so you can't just lay off people as easily as you can in the US for pretty much no reason. But it seems workers are still too divided to really come together and achieve such 9initiatives. Be it unions, pressuring their governments to make new laws, or simply chastising and boycotting companies who engage on such actions.
In healthy working free market. There should be competition delivering better product at cheaper price.
Maybe one thing we should do is to allow suing company executives for breach of fiduciary duty when they waste resources on some useless project or feature. This could make many companies more efficient.
Oh and also ban dumping. You should not be allowed to sell stuff below cost of production. Development effort with big maybe ignored.
Private equity (what's being described here) has more political influence than "society" because money.
Society has more money and way more votes than PE. I'm going to quote A Bugs Life (1998) of all things here:
> Hopper: You let one ant stand up to us, then they all might stand up! Those puny little ants outnumber us a hundred to one and if they ever figure that out there goes our way of life! It's not about food, it's about keeping those ants in line.
In our case, it's more like a million to one
I suspect that the free cash flow of those who seek fewer regulations of this sort on thing exceeds the free cash flow of those who seek more.
People that are being squeezed by PE have less money to wield as political influence partially because they are being squeezed by PE.
The ones doing the squeezing are ok with that.
The people who are uninvolved, who fit into neither box, don't care enough or don't have enough money they're able & willing to part with. They also don't have fancy accountants or corporate accounts to expense it to.
This is the local optimum.
>The people who are uninvolved, who fit into neither box, don't care enough
That lack of care is going to cost us all in ways we'll be forced to care about one day. Not necessarily for Vimeo, but definitely much more important things that people are ignorant or actively turning their heads against.
> They also don't have fancy accountants or corporate accounts to expense it to.
We call them our represenatives. We expense it to them with our votes (and literal expenses with tax dollars we are forced to part with). But votes require care and we're back in the loop.
> That lack of care is going to cost us all in ways we'll be forced to care about one day.
By then, it'll be too late. The ruling party has a monopoly on violence, perpetrated by sycophants and enabled by wide-area surveillance analyzed by AI. We're a matter of months (maybe years) away from kill-drones being used with impunity against the populace.
> We expense it to them with our votes
Gerrymandering by the ruling party has ensured that your vote won't make a difference. Even if it did, election interference by the ruling party has ensured that it won't be counted. Even if it is, the ruling party has expressed its wishes to cancel elections, and who's gonna stop them when they have all the kill-drones and thugs, paid out of a bottomless bank account?
SaaS is the detriment to society. Static feature software continually updated and changed to create a faux justification for $20 of your money a month, keeping you on an endless treadmill to in order to work with all your old data.
Sometime in the late 00's they realized people were still happily using software from the 90's, because it worked for their needs, and well, we can't have that...
In the Reagan loving greed of the 1980s this was considered vile, movies were made and the people that did it excluded from polite company.
This is just how capitalism works in a competitive environment: it allocates capital as efficiently as possible.
I despise their business model, but it is what it is.
It really doesn't have to "be what it is". We can strive for actual change. But everyone's still too cushy for that, it seems.
But what actual change do you want when the very founders of these companies like Vimeo, multi-multi-millionaires decide to sell their life's work, customers and workers very well knowing what the fate's gonna be, just to be even more wealthier?
To summarize what I put in another response: I personally care less about holding the multi millionaire into account (though I wouldn't mind it at all) and more about making sure employees over such deals aren't lied to and then have lives upended at the drop of a hat. Workers and customers do not in fact "know what the fate's gonna be" and that's the problem to address.
I won't repeat the same usual solutions again, but I'll mention one thing that already exists: the WARN act. The spirit of this is good, to give employees a 3 month buffer of when their job is ending. But it's clearly abused at worst, and not enforced at best. It's not as good as other countries' worker rights, but ot exists today to be looked at. In addition, severance can help to. This is standard, but even the "generous packages" in the US tend to be on the lower end of what other countries need to do.
Basically, it shouldn't be a drop dead easy decision for a company to mass layoff and have the workers surprised at the facs. It needs to both be slowed down and give immediate short term costs. That's a start of "kinda actual change" to strive for.
> Workers and customers do not in fact "know what the fate's gonna be" and that's the problem to address.
1. Bending Spoons model is known, everybody knows as soon it's announced
2. The company belongs to the shareholders and founders. It's them making the decision.
#2 is why the government, via laws, needs to establish employment rights, such as redundancy payments when someone is terminated due to their position being no longer required.
Those rights need to show up in company balance sheets as a contingent liability.
That applies when the company is acquired as well.
The employment of a company need to be either paid out to employees at net present value, or need to be transferred to the new owners as part of the sale.
In the US, with employment sponsored health insurance, it's even more important.
1. we're on a tech forum and can quickly link to other discussions on the company. Many employees may not even be aware there was a change in management. If they were, their statement outright lied to them saying they still wanted to continue to grow. Meanwhile, many Vimeo clients won't know about this for months or even years. So no, not everyone knew.
2. And I'm saying a cooperation shouldn't be able to make reckless decisions like "lets lay off most of our workforce" withotu reprecussions. Like most civilized societies outside the US do. Thats's what the bulk of my previous response is about.
What are you arguing? That you can do anything you want to something you own? That's not true for nearly anything in modern society.
I can assure you everyone knew exactly what was coming from the moment the acquisition was announced
> I don't understand this model. Such significant layoffs would indicate that there is no real appetite for expansion or growth.
To play devil's advocate, maybe there's a point where a product or service needs to stop evolving and just be.
I have a Vimeo account that's been on auto-resubscribe for years. I couldn't tell you a single feature they've added in the last 5 years, but they host my videos, collect stats, and let me send links to my friends, and that's really all I want.
> customers of a depreciating SaaS product surely churn after a 1-3 years, so they wouldn't make enough of a return
You might think that. Then there's Earthlink and AOL still collecting $5 or $6/mo per mailbox as their cash cow.
They recently bought AOL too!
I was unaware, thanks for the update.
I imagine a lot of companies have contracts with Vimeo and switching costs are real. They'll likely stick with Vimeo if they manage to maintain their offering to the level it exists at today. In the long term I think it guarantees death but they will be able to extract plenty of money before that happens.
The long tail of revenue is not only a substantial sum, but decays more steadily than growth. This is a low risk investment that still turns a profit.
It's also not their only investment or even necessarily their own money. Individual holding companies don't tell you much about the larger pool of money they come from.
They did the same thing with Komoot and other apps. I don't understand where the money comes from and how they are planning to keep this portfolio growing.
It seems to all be debt financed, i.e. just a private equity model slightly specialized for tech. The "innovation" is that Bending Spoons has an in-house engineering team it seems they try to keep constant yet scale out to all the acquisitions. I hadn't looked into them much before, but https://www.colinkeeley.com/blog/bending-spoons-operating-ma... is an interesting report -- though not focused on the finance side.
(For Komoot) Did they, though? I am aware of the layoffs, but after that they slightly redesigned the app, collected the poll for next year's requested features, the lifetime maps option is still there to buy etc. If not for HN, I wouldn't have noticed any change in the direction that it's going in.
I suspect that the VAST majority of users want their saas tools to do today what they did yesterday, and so stopping active development of new features is actually a positive - no sudden Liquid Ass is going to appear in a program in maintenance mode.
It's a vampire economy. No one has any new ideas
you're absolutely right, they're not positioned for expansion or growth. you're very close to seeing the private capital dark pattern that's become a huge part of our economics lately. let me illustrate for you how they make money by decoupling the company's success from the investors' success
1) borrow a bunch of money to buy the company - this is called a leveraged buyout
2) once you're in control, have the company assume the debt you took on in order to buy it. you as the buyer are now free and clear, and the company is now responsible for paying back the money you borrowed to buy it. the end result of this transaction is that the company now owns stock that is less desirable because the company is more leveraged
3) make huge cuts everywhere and use the money "saved" by divesting from your own future to pay yourself as a consultant
The company is now in the extremely fragile position of not being able to spend to respond to the market because all of their income is going to servicing debt and paying the members of the private capital group. the "investors" aren't actually invested at all because even if the stock they hold becomes worthless they didn't pay anything for it in the first place, the company did. the thing limps along for as long as it can keep bringing in some small amount of income for the "investors" to skim off the top of, then it inevitably dies like anything riddled with parasites will, the company declares bankruptcy and they sell the copper out of the walls in order to pay back the loan used to take the company private in the first place
Sometimes solutions end up solving problems that don't need constant featuritis.
Maybe they're deciding to maximize locked in revenue and margin.
Laying off so many people doesn't seem signal the greatest confidence to the market, maybe they'll explain it as some kind of efficiency alignment.
After all, Twitter is still operating on some level after 75% layoffs?
My best guess is that a part of it is replacing US (or in this case Israeli) devs with much cheaper Italian/European ones, earning ~a quarter of their US counterparts and working longer hours, as Bending Spoons has an extremely competitive hiring process, and is probably the highest paying tech company in Italy
Actually they're paying very competitive salaries. For example: https://jobs.bendingspoons.com/positions/67c6dc18c70c531d6db....
I can't see any salaries there but presumably they're going to be competitive for Europe, which is roughly half the competitive salary in America.
There are plenty of competent devs outside America. I can't see any reason why you'd want to pay American salaries if you're a global company.
An annual salary of £85,797 in London for a junior is impressive, too.
AFAIK that's what they offer to juniors straight out of university and usually even give a substantial pay rise after the first year. I don't know other places in Italy that can match that.
They are also very good at pooling their infrastructure and software stack. This accounts for a significant portion of the costs.
This is just my personal opinion, but if they didnt change the price of Evernote and never made any changes, I probably would remain a customer for a very very long time. There is a high switching cost for me to use any app to move all my docs, and notes.
I dont know if the same can be said for Vimeo, though
I would still be a happy Evernote customer if they hadn't rewritten all the apps from scratch.
You're assuming all or most paying customers are paying attention. That is sometimes not the case. For example folks/businesses who forgot they signed up. Alternatively it could be that the cost to switch is too painful.
One of the advantages of their business model is that it's low risk. Find a business you can get cheap enough, shut off all investment related to growth or product improvement, and use the product's moat to get as much cash as possible from current customers. Business doesn't have to be about expanding into new markets or growing revenue. If I had to guess, there's not much of a market for the companies they're acquiring because everyone else is looking for growth.
Its just private equity for software
Startups focus on building assets, not revenue or profit.
Companies like Bending Spoons focus on buying these assets and turn them into $$$$$$$$, not sustainability or growth.
The growth comes from increasing subscription value, not from adding users. They bet that the platform is sticky enough for the users that they’ll slowly boil the frog until there’s no more equity left.
Are these hostile takeovers? buying a competitor out through a PE deal could be cheap relative to competing with them.
No, they just come in and offer a lot of money to the current owners. Bending spoons are ruthless businesspeople but AFAIK they do offer a reasonable price for the businesses they acquire.
(I used to work for WeTransfer and some time after I left it got acquired at about the price it was once considering IPO-ing at. This was apparently such a good offer that it took very little deliberation to agree to the deal.)
but where does the money come from? it seems like a good way to avoid regulatory scrutiny if your acquisition goal is to simply exit a competitor from the market.
The money comes from investors. Private Equity basically works by taking money from investors to buy companies and turn a profit with them, paying back the investors when they do so (it's a very illiquid and risky investment, so the advertised returns tend to be higher, but it does seem like a lot of firms are struggling to actually make it work).
Aye - it’s a simple business model, which seemed to work well in an era of low interest rates. However some of these tech buyouts seem quite myopic, making it almost appear like the goal was to shutdown the company.
You really seem to want to believe Bending Spoons buys companies just to shut them down, for reasons that are not entirely clear unless you believe that they're owned by a secret conspiracy made out of note-taking, file transfer and video hosting companies that is willing to engage in a multi decade plot to very slowly buy out competitors. They then shut down the acquired businesses for no clear benefit, even though they're still profitable and new competitors could easily start up. So this conspiracy (if it exists) would be very slow and not very effective in keeping down competitors, especially compared to all the other things the conspiring companies could be doing.
Each individual company Bending Spoons acquires has a limited lifespan, so if you only look at a single deal it can indeed look myopic. But the whole point of their business model is that they use the cash flow thrown off by the acquired businesses (which are much more profitable for a short while due to firing 75% of personnel) to fund the next acquisitions. This can keep going on indefinitely, or at least until there are no more businesses to acquire.
Basically a loan.
It is called bait and switch.
And the company name referring to bending spoons (Uri Geller) gives away the way they see themselves.
Bait and switch is something completely different.
If you started buying Evernote 10 or 15 years ago, and use it a lot, then Evernote gets acquired and the terms change, that's shitty but is not remotely a "bait and switch."
You bought a relationship with a service company that locked you in and sold you out. That's absolutely a bait and switch, just one of service instead of goods, because it's a SaaS company.
This is the real reason I'm tired of subscriptions. I don't even care about the "pay in perpetuity" problem in some cases, I just don't want the entity I chose to do business with to completely change.
That's absolutely a bait and switch.
According to Wikipedia, the name is a reference to that scene from The Matrix.
So it's sort of a "white-dwarf maker" company. Pick a company with a steady cashflow, eject all the fluff that made it a big star, and collect the remaining energy / cash until the core cools down. The end state is a cold slab of iron, and nothing new is going to happen to the acquired business ever since, but the plentiful (if dwindling) cashflow will be collected without any obstacles.
> appetite for expansion or growth
This requires reinvesting profits into the company. It sounds like they choose not to do that, but instead switched to cashing in.
If the profits are stable and supported by a fraction of the workforce, then why keep the rest around? Clearly a shitty thing to do, but business-wise it makes sense.
Vimeo isn't really SaaS though.
Of course it is?
Look at the companies they're acquiring - it's 100% about getting user data and tertiary monetization, and they're making bank. They couldn't care less about what the companies they buy supposedly do.
To be honest, how much staff do you need to run a file transfer service.
This is the same model Computer Associates used to run back in the day. Find product with marginal profit but dedicated user base, cut costs, increase pricing and milk it until the next product comes along.
Seems to be very common nowadays for PE
Is this any different than the SaaS business model, except a 3rd party bought the company to strip it?
Everything SaaS these days, hell every subscription these days seems to involve product enshittification + rising pricing. Is this the end game of the financialization of everything?
I’d love to see how this impacts their bottom line
Sure short term it’s more “focused” and “greedy”
But the damage to the community and acquisition through a free tier must drop those numbers in an impactful way
Oh, it will - but they don't care. I'm sure they'll eek out 1.5b from their 1.3b acquisition and be happy as clams.
It certainly is depressing to look at what was built and what could be made of it but most of the folks with money lack the creativity or skill to actually build a lasting business. Just burn it down and rob it on the way out - such is the modern economy.
I mean, Broadcom / VmWare is basically doing the same, just more for enterprise level software.
OTOH - if Vimeo has given up all hope of further new features, then giving current users the chance to keep going isn't completely evil, even if it's at a higher price. VmWare is basically doing the same, and lots of customers are leaving, and those who aren't may still eventually do so, etc. (Edit: what if the alternative was Vimeo shutting down?)
Think of vintage car parts - if you absolutely want to restore that '30s Ford (keep using 20+ year old software) - someone offering an OEM-equivalent part for 3x what it cost back in the day (even adjusted for inflation) may actually still be good value - because what other alternatives are there?
Now - does it suck for the employees? Sure. One thing an econ prof said back in the late 90s (who loved to guest-lecture to CS/SWEng students): your job as a software person is to put other people out of work by automating stuff they used to do manually. Are you ok with that? Because if you're not, you should go into a different industry right now. Feels much worse when it's programmers getting the axe due to finance types, but not unexpected.
It's a whole business model. I know a Private Equity that bought AOL dial up business, laid off most staff and turned into a cash cow. Mostly because almost all customers are super old and can agree on anything "AOL" throws at them.
It's interesting to think about which current companies will be acquired by BS in the future. Evernote and WeTransfer were huge ten years ago.
Elon Musk acquired Twitter and fired %80 of the employees and it was just fine.
I bet there's so many more people that can be let go from all tech industry. It's mature and product discovery is mostly locked behind advertisement so what's left is exploitation.
If you think about it, as long as you don't mingle much with the product that works it keeps working indefinitely. It's no different than running Excel or WhatsApp, especially when the servers are managed by 3rd party providers these days.
Losing tens of billions of dollars on a company now ruined down to single digit billions of revenue is a weird thing to describe as "just fine". That looks like abject failure as a business.
Fire the engineers but don't do the nazi stuff. The software functions just fine, lack of engineers isn't the reason of the downfall of Twitter. If anything, it's better product than ever, it's just that it harbors too many deplorable people.
It's fine because revenue is not important. Elon Musk has made that clear openly and repeatedly.
https://www.businessinsider.com/elon-musk-misquotes-princess...
https://people.com/elon-musk-tells-disney-other-advertisers-...
If it wasn’t for all the political histrionics we would all be celebrating Elon’s amazing abilities.
From the previous press about the aquisition:
BendingSpoon CEO: "At Bending Spoons, we acquire companies with the expectation of owning and operating them indefinitely, and we look forward to realizing Vimeo’s full potential as we reach new heights together"
Vimeo CEO: "We are excited about this partnership, which we believe will unlock even greater focus for our team and customers as we continue to strive towards our global mission to be the most innovative and trusted video platform in the world for businesses"
Words no longer appear to mean things. While this isn't a surprise, it provides another data point that there can be no trust given to leaders words. I find it sad as it simply re-inforces this behaviour and normalises it.
Nothing the bending spoons ceo said isn’t true. They are still operating Vimeo.
I worked at one of the companies that were acquired by Bending Spoons and really the only positive things I can say about them is: They are honest and stick to their word.
It's a shitty business model, run by people who do not, in any way shape or form, care about people at all. But they are honest.
So if you work at a company and BS comes knocking: relax, accept the severance money and start looking for something new. It will be over soon. And you also don't want to stay even if offered because it will be an entirely alien environment where only people of a certain character can work.
> where only people of a certain character can work
Out of curiosity, could you expand on this? Gutting engineering playgrounds and other inefficient crap to maximize ROI sounds like a fun challenge. It's essentially performance optimization but applied to a whole infrastructure as opposed to individual parts.
Applied through the proverbial front door a few months back to have a chat and unsurprisingly got a generic rejection, but wouldn't mind trying again using a better channel. Question is of course whether they'd be willing to pay enough to make it worthwhile.
Same and I can cosign all of the above
There's a large contingent on hacker news that still thinks it's some kind of moral failure to fire people
some people look at business as making money for the sake of making money. However other people look at making money as a means to better society. This goes back over a century to the Quaker run businesses, like Lloyds, Rowntree, Cadburys, etc.
You can imagine if your ultimate aim was to improve society, then acquiring a firm but having to sack a bunch of employees as somewhat of a failure.
>some people look at business as making money for the sake of making money. However other people look at making money as a means to better society.
if the two sides you describe agree on those definitions as mutually exclusive but in union describing the universal set of people, then they are both wrong.
as long as people engaged in a market make their own choices, then money is a direct measure of happiness on the margin. you give somebody your money in exchange for something you want and would rather have: this creates happiness out of thin air.
if you think a better society is a happier society, then going into business to make money is the same as going into business to make society better.
> as long as people engaged in a market make their own choices, then money is a direct measure of happiness on the margin
That is a big if which is straightforwardly false. This idea of market participants' choices being entirely free rests on the efficient market fallacy [0]. Whereas the reality is that even the structure of a market itself creates friction. One of the main points of business schools is learning how to recognize and take advantage of this structural friction, which business people then conveniently forget when it's time to assuage their own egos regarding their counterparties.
[0] which is basically in the realm of asserting P == NP. The supreme irony is that if the efficient market fallacy were true, then central planning would also work as well!
>This idea of market participants' choices being entirely free rests on the efficient market fallacy
in an inefficient market, you can still choose to transact or not, and you will only do so if you feel you will benefit.
in an efficient market, the net benefit across society will be higher, but nothing in what I said requires an efficient market.
so you are simply wrong.
No, you cannot necessarily to choose whether to transact or not. For life's necessities (eg food, shelter) this is straightforwardly obvious. And you are making this claim in the context of the employment market, which is one step removed from that.
But even in the general case your argument still does not make sense. When we talk of a business providing societal utility, we don't include the business owner themselves in the integral. For example your assertion lets you conclude things like a casino owner who has made a pile of money but impoverished the community has made society better.
>No, you cannot necessarily to choose whether to transact or not.
I didn't say you could, pay closer attention or you will not be able to understand arguments or learn anything.
What I said was, "as long as people engaged in a market make their own choices, then money is a direct measure of happiness on the margin."
however, your mistake does contain a germ of reinforcement to what I said: if you cannot choose to participate in a transaction, you will be less happy, i.e. allowing sellers to offer choices and buyers to make choices will increase happiness in every type of market.
before you make another mistake and go shooting off, I didnt say people will be happy, I said they will be happier, but happier is an unmitigated good.
Try harder to not be a condescending dweeb, or you will not be able to have amicable discussions or overcome your own airtight but inapplicable logic.
I did not "reinforce" the exception of what you said, I pointed out an error in your framing that necessitates coming at the analysis a different way. The context of what you're responding to is a company laying people off - reducing the number of choices in the employment market. We're not talking about the dynamic of someone creating a new business and having to emphasize one or the other, but rather an existing business where the owners are choosing to change things to be closer to one end of the spectrum between the two.
>in an inefficient market, you can still choose to transact or not
And if everybody chooses to not transact, you have a market crash. So... waves at 2026/2027
Society depends on long-term 'happiness'. Short-term 'happiness' often makes society worse.
what you are actually saying is that a certain class of people "know better" than what another class thinks they want.
If you look at financial markets and finance theory, there is no validity to the idea that people are long term blind and short term mistaken. markets discount the future, they are the best estimates of the future rather than somebody with no skin in the game magically "knowing better"
> they are the best estimates of the future
its plausible for companies to be worth less than their assets. While it might be the best estimate its still not necessarily the best one. aka the market can stay crazy longer than you can stay solvent. Markets measure confidence as much as they measure value.
What about externalities? What about policy makers going after short-term gains?
and this explains why the USA doesn't have universal healthcare, or why a generation of the world's population now serve as eyeballs for advertisers using applications specifically designed to be addictive in order to enrich silicon valley startups. You certaintly wouldn't get here if you started with the question "how do we want society to look like?"
Imagine if the owners of modern day factories thought a little more like this [0].
[0] https://en.wikipedia.org/wiki/Bournville
Option A: the business goes bankrupt, investors lose money, customers lose the product, all employees get fired.
Option B: the business stays afloat, investors make money, customers keep the product, some employees get fired with a severance.
You think option A is superior?
Here's the rub: Vimeo was profitable, and had no debt. Per their last public filing(s), in 2025 the company had: - ~$400M expenses - ~$420M revenue (therefore ~$20M profit for the year) - ~$300M of cash in the bank (no debt)
Vimeo has not had major growth in recent years, but it was making progress, however slowly. Just nowhere near the 10x expectations out there. Nobody was going to lose anything.
For a company that makes a flat $20 mil per year, how long will it take to make back the $1.4 billion they paid for it?
Presumably Bending Spoons believes they can optimize a lot of that 400M expenses while keeping revenue flat or even growing it. At least they believe enough to make a 1.4B bet on it.
Maybe?
This sounds more like a reverse mortgage line of business, to me. Bending Spoons is betting they can eek enough revenue out of Vimeo to pay the interest on the $1.4B loan by cutting the $400M expense run rate.
The actual loan principal will be paid out (if it ever does) of the money they expect to bring in when they inevitably go to an IPO.
And at that point you have speculators carrying risk, bankers getting rich off interest, leadership raking in millions, and a once reasonably healthy business is jeopardized (subject to the performance of other Bending Spoons properties, risky management, etc). All in the name of growth that may or may not be achievable.
Your options are too coarse. There's good and bad ways to get fired (and there's nothing here saying they got a severance to begin with). How about a 3 month warning? How about guaranteeing a 6 or more month severance after those 3 monhts? How about even before this sell goes through you make sure employees benefit from the 1.4b with more than "well my company stock got a tiny bump"?
What I see here is "Business stays afloat, investes make money for now, customers get a continually worse service and eventually leave, and a lot of good talent is out on the streets over corporate greed". This is only a win if you're an investor, and only in the short term. So I'm not convinced this is better than option A in the long term.
what option C where you make _less_ money (you still make _some_) but your employees are better able to send their kids to college?
it's not immoral to fire people.
it's immoral to lie to people.
very few people can do the mental gymnastics required to equate " we look forward to realizing Vimeo’s full potential as we reach new heights together " to "you're all getting fired."
at some point in the now far-distant past CEOs used to make heartfelt speeches and memos to a soon-to-be-downsized staff about how hard decisions had to be made and blah-blah-blah; now it's more about sequestering the decision makers away from the damaged goods while projecting daisies and sunshine for would-be investors.
The game has shifted far from the human factor into a purely financial/investor loop. Good for some people but generally worse for people .
And before I hear it : Yes it was always about money, but business wasn't always about investors . That projection of liability to a remote party is exactly the issue.
This was exactly my sentiment.
Going from "you're fine" to "you're fired", when it was always going to be "you're fired".
Bending Spoon's business model has been -- at least for a decade -- buying companies that didn't operate profitably; stopping or slowing ongoing eng investments; and operating them profitably. Often that involves raising prices, but everyone is adults here.
Nobody lied. Vimeo will continue to operate, and probably will even have targeted ongoing development.
We just demontrated why it was a lie. Gaslighting the workers with "well you should have known he was a liar" does not absolve the liar of lying.
>and probably will even have targeted ongoing development.
well, 15 of them or so.
You can't point out the place where they promised the workers jobs. Because there was no such commitment, either before or after the sale.
The company failed. In 4 years, they managed to turn the valuation from $8.5B to $1.4B. No employee should be in any way surprised by what happens when you watch your company's valuation fall that much. Anyone surprised by this wasn't paying any attention to the company's operating metrics (they only made $27m last year!) to a negligent extent.
It sucks for the people let go, but they can't be surprised.
you're arguing de facto with de jure. Not a historically healthy way to argue. We aren't lawyers here.
>Anyone surprised by this wasn't paying any attention to the company's operating metrics
Dude, I just want layoffs to be signaled ahead of time. You can defend billionaires all you want and gaslight engineers for not being marketing majors. My demands are very simple.
Everyone saw 21: -50m, 22: -80m, 23: 21m, 24: 27m and knew this was a dead company walking. With one or more annual founds of layoffs since at least 2023. Oh, and low revenue growth and falling subscriber counts.
That's not marketing or gaslighting, that's expecting people to pay minimal attention to their employer's financial performance. Minimal here being on the level of possessing object permanence.
It's a moral failure to fire people without any notice for reasons unrelated to your company failining and not being able to afford you, yes. Let's not mince words here.
There are proper ways to let go of people, but that's not how it's done in the US.
Obviously sometimes a business is unsustainable, and it's unavoidable, but it's pretty sociopathic to not consider that people are harmed by being laid off.
They are literally not harmed. The end of an at-will employment agreement is not a harm.
>The end of an at-will employment agreement is not a harm.
So if you got fired tomorrow for no reason in particular, you would not feel "harmed"? No family to support, bills to pay, or career to progress cut short? No trips nor big purchases that need to be re-planed or cancelled? No obligations you need to cancel because last week you were fine and this week it's all about scambling for a new job? This is the most asinine thing I've heard here yet.
I didn't have a choice in my society on what contract to take. And the power dynamic is unequal. I don't consider being suddenly laid off as "harmless" with that in mind.
They were at-will employment. That should have been considered with their every purchasing decision ever. Their personal and moral failures is not their employers failures.
Budgeting is trivial thing. Spend less than you earn. And it is not like these were minimum wage workers. They should have known to have plenty of buffers at this point. It is entirely their own fault of not reach that point.
You didn’t answer how you would feel if you are fired tomorrow friday?
>unlock even greater focus for our team
I guess that's the new buzzword for "by removing most of the team from the equation and focusing the rest on everything". Noted.
>our global mission to be the most innovative and trusted video platform in the world for businesses
2 issues here
1. why would I trust a company who will flip around and remove nearly all its labor overnight?
2. I don't know how this move makes them more "innovative". You're just going to be burning out the very few people left to support the product.
I'm bold enough to call this a blatant lie.
After reading through the other comments about bending spoons and reading yours again: the bending spoons CEO is technically telling the truth! They intend to run the acquired companies forever. After cutting most of the staff, but he didn’t say that part of course.
I wouldn't even say it's "technically" the truth. It's just the truth. Nothing in the statement even comes close to implying that there wouldn't be layoffs. Hell, one of the quotes even mentions "focus", which if anything is a euphemism or hint for downsizing in these kinds of statements, not the opposite.
"excited about this partnership, which we believe will unlock even greater focus for our team and customers as we continue to strive towards our global mission to be the most innovative and trusted video platform in the world for businesses"
There's no hint of laying off all the staff here though. Now it sounds like they "were" excited to lay off people to maximize profits.
Maybe "unlock even greater focus for our team" means to unlock their focus to find other jobs but it's quite perverse. I agree with the OP, that "Words no longer appear to mean things"
> There's no hint of laying off all the staff here though. Now it sounds like they "were" excited to lay off people to maximize profits.
What? Just because a statement says "we're excited to do X" doesn't mean they're not also planning to do A, B, C, Y and Z.
I'm not defending the layoff. It just seems weird to interpret the statement itself as somehow being misleading about a subject that it literally didn't mention.
There's letter and spirit of the word. You're arguing against the spirit of the word because the letter of the word is technically impossible to prove as a lie right now.
We call this lawful evil logic for a reason. It's how you empower stuff like Jim Crow laws (or the current US administration in general. "Well he isn't going to actually invade a NATO ally, he's just saying he wants Greenland. I want a Ferrari!")
You want the truth? You can't handle the truth! :-)
Those words weren't truth. Truth would have been to state the intent to fire employees in order to maximise profit. This was always going to be the outcome, and it was expected, why not just state it clearly?
Again, when truth becomes a grey area that is to be manipulated for maximising profits that benefit a minority of privileged individuals, we should be concerned and at the least, not normalise it with "its just business".
I don't like layoffs, but if the statement in September said "we are going to lay off most of our talent in January for blah blah blah corporate mumbo jumbo", it'd suck but I'd see nothing wrong with it. The employees get a 3 month warning to plan around, and the company can do whatever it wants from there.
But that's not the society we live in.
A reasonable person, when told "Company A is buying and will operate Company B," would interpret that as "all of Company B" including its assets, liabilities, cash, property, patents, AND employees. They would not think "Well, ackshually, they're just buying the corporate entity itself, which doesn't technically involve keeping the employees..."
If "reasonable person" means "someone with literally zero experience reading any business or acquisition news whatsoever" then I agree with you. Hell, the OP literally begins the announcement with, "As expected."
>"someone with literally zero experience reading any business or acquisition news whatsoever" then I agree with you.
Most people aren't entrepreneurs, and they may be an older folk who grew up expecting companies invested in employee retention and building careers.
Those "reasonable people" were lied to.
Only if you believe the primary purpose of a corporation is to provide employment, as opposed to generating profit for its shareholders.
(To be clear, I think the latter is both descriptively true and normatively good)
if corporations only exist to make the rich richer, maybe it's time to eat the rich. Corporations' outward goals used to be to satisfy their customers. That may have never been the internal case, but it isn't even pretended to be so nowadays.
Severely downsizing the company isnt a good vibe to a customer. I'd definitely be migrating off Vimeo if I did any serious business with them.
Any reasonable person who has paid attention to business news over their lifetime would not be surprised to see layoffs following a corporate acquisition.
> who has paid attention to business news over their lifetime
So, less than a percent of a percent of people.
Try to be innovative without staff though...
Here comes the AI buzzwords.
I wish I was kidding. Their search result brings up
>Vimeo AI-Powered Video Platform
anyone who knew Vimeo pre-pandemic knows how eye-rolling this is.
The Vimeo CEO is also right -- this action technically unlocks greater focus for their team!
Yes, this occurred to me also. If that is how he intended it, it is extremely disingenuous, at best, and another example of manipulation.
As others mentioned, the statement seems true.
But even more, it seems like the statement implies layoffs if they are acquiring a startup or growth-orient company. Bending Spoon is saying they intend to run the web site/web app as-is and make money. That means they will discard employees who have been employed with hope of growing/pivoting/etc the company. In start-ups, that can be a lot of the employees.
Of course words don't actually mean anything.
I've been through this myself once upon a time I was at a company and the way they described it is they just changed owners habitually.
Within about 4 months of this ownership change they fired my entire office. Luckily I was already some place new.
Yes. It's a zero trust society. Nobody can trust anybody else. The only thing that's trusted is money in a bank account... And we really shouldn't be trusting our eyes there because the money is backed by nothing and there is no reliable consensus between different banks (look at the details of correspondant banking and factor in things like the Eurodollar, stablecoins...).
It's like; the thing we trust the most cannot be trusted but so long as we keep using money in its current form, this implicit form of trust is devaluing the trust of everything else that's not money.
Our relationship with money sets the bar for all other relationships. If it's a deceptive relationship and we tolerate it, we will tolerate every other relationship which is equally deceptive. We become accustomed and tolerant to a certain level of deception. We are also emboldened to deceive others.
Our relationship with money is highly deceptive and getting worse over time. We can expect to see the same trend in our relationships.
I think money CAN buy trust; it works by devaluing the entire concept of trust to the level that it can afford to buy it outright. It maintains a monopoly on trust.
So are we just going to acept that words no longer mean anything and carry on through life distructing of everything we navigate through? That isn't the only way.
Things happen. Times change. It's just as important to know when to throw in the towel as it is to know when to persevere.
The acquisition concluded in November 2025, only 2 months ago.
That statement was from September. I can even dig up the discussion here on the annoucement:
https://news.ycombinator.com/item?id=45197302
Reading the comments there, I shouldn't be surprised at this maneuver.
These are the things that happen - taking a company and strangling it to make a 10% short term return.
It’s like of funny, we give corporations personhood, but the type of person that can be owned by another person, or murdered for profit
Imagine what would happen if we tried these actions like we do for real murder trials.
"CEO John Doe is found Guilty of maiming Company B to the point of bleeding it dry of its funds, resulting in bankruptsy. Due to person-hood laws, we sentence you to life in prison. Thank you for your attention on this matter."
This is potentially disastrous to content on the web. Vimeo provides a platform-as-a-service known as OTT, that powers well known branded streaming services, like Criterion Channel, HistoryHit, Dropout, DIRTVision, Speed 51, URLTV, Armflix, MHz Choice, Trinity Broadcasting Network, SommTV, IndieFlix, BroadwayHD, Full Moon Features, etc.
I assume they’re pulling a Broadcom here - the big OTT customers will not be able to easily escape, if at all, without major effort.
Little folks can run, but Bending Spoons won’t care here. They want to milk the enterprise video agreements.
No, not the Criterion Channel, too! Hopefully they can migrate to a different service without too much fuss.
Watermelon+, too!
Probably they will also fire remaining 15 people and move everything to Italy.
Their strategy is to
- fire everyone,
- give product to very small but ambitious team of people
- cut free version of the product to minimum even if does not make a sense to have a free version such as 5 video upload per month etc (they are doing this just to avoid backlash from users and community)
- use every possible dark pattern exist to get every penny from the users
I'll be surprised if those engineers don't want to leave the company themselves after these layoffs.
As a longtime user of Vimeo (since 2009), I was afraid this was going to happen. I built our own HLS video streaming in-house a couple of years ago and never looked back. Way faster, lightweight player, uses modern apis and codecs.
Now I'm working on productizing that at https://framerate.com/ (beta launches next week!)
There's another Vimeo alternative at https://framerate.tv - not sure which came first!
We did. https://framerate.tv
Looking good! Completely different products though.
What is it? The page is vague to the point of uselessness.
Nice work. Aren’t there decent open source alternatives though? What do you think your differentiation will be vs. a customer using an open source solution and hosting the video chunks on a CDN - or even S3?
Thank you!
There aren't any end-to-end open source video host solutions out there from what I can tell. DIY ffmpeg + a CDN is a great way to go. But quickly erodes when you want all the other niceties that are table-stakes today (like storyboards, subtitles, chapters, etc.).
I'll have all the niceties, but I plan to differentiate mainly on performance and quality.
- Higher quality compression (via AV1 encoding) - Fast load times worldwide (Framerate's custom player is 18kb gzipped versus 200kb+ for vidstack/mux) - Better publishing experience (bulk editing options, team collaboration, etc.)
Sounds good. I’d suggest niching down and talking to some customers to see who genuinely cares about those things - as they might turn out (tragically I know) to be things only techies care about.
Fair warning.. when we hear talk to customers we are tempted to reply “I talked to customer in my mind and they love my thing!”
But unfortunately customers in our minds don’t have money :)
There’re either customers out there, or if not there's learning about why youtube has almost 100% market share..
Wishing you genuine luck and success!
Yup, good points! Thank you. I'm building a pretty generic tool for now and hoping a couple of niche use cases surface here soon.
I quite like this. I am your customer possibly. will bookmark
Sorry to say but that doesn’t sound very hopeful.
You need a customer my friend.
Building video streaming is easy. Selling video streaming is difficult.
damn framerate looks good
Someone just posted an inside story of what went on inside of Vimeo: https://news.ycombinator.com/item?id=46757868
I see these acquisitions as a reset. They spend a huge sum to acquire established, but struggling, products and strip the size of the company to the minimum required to keep it operating. This is very much the Musk model.
At this point they have stopped the cash bleeding and made profit margins healthy again. From there they can more easily rationalise how to take it forward over the next 5-10 years.
That might mean stripping unpopular product features, rebranding, going upmarket, whatever.
It’s a real shame for all the staff, of course, but from a business point of view it’s going to be interesting to see how it plays out.
I have no hope for Vimeo.
BS took over Evernote and I cancelled the subscription after a year. Their idea of value for the customer vs the price is not realistic.
Bending Spoons: Wow, they gave us money for a year!
spending X00 million dollars to get maybe $200 out of a user is certainly a flex.
That’s exactly how their economics work. I do wonder exactly what numbers they are working with.
Just realized the acronym for Bending Spoons is BS. Seemingly appropriate.
In my youth -- the mid-90s -- one of the most scathing slurs our circle of friends could bestow on a person was that they were 'a spoon-bender'.
Uri Geller being a … well, this is a family site. Finish that yourself.
I'm still mad at Uri Geller for suing Nintendo and preventing Kadabra from appearing in games.
I just recently found that Vimeo is hosting MST3K, with free playback of the original episodes (Joel and Mike).
So for selfish reasons this makes me sad. I'm guessing MST3K will need to find another host, perhaps with less generous terms.
Edit: I really hope that doesn't mean RiffTrax will also have problems.
Hmmm... I just learned that mst3k has even more moving parts at the moment: https://www.byteseu.com/1717645/
They are also the backend for Dropout, which has just shy of 1m paid subscribers.
So I understand your selfish sadness feelings.
https://vimeo.com/customers/dropout
That's partially due to history: Vimeo was split out of CollegeHumor, and CollegeHumor became Dropout. (Both were part of IAC and were spun out/sold off.)
Dropout originally only used Vimeo for video distribution. They switched to Vimeo for OTT only after running their own with a team of developers and finding it to be an unexpectedly hard task. I think I learned that in the Sam Reich Hank Green Decoder interview.
Well, some good news is that if you've ever wanted to build a new video streaming platform there are a bunch of companies that'd love to sign up.
I'm sure dropout et all will be able to continue with their same level of functionality in the short term but I can imagine the bills they'll be receiving will be escalating quickly.
Dropout's CEO has been pretty open about the company, and he described their early efforts as 'Brutal'
> No! We tried, but people don’t realize this. The first rendition of Dropout was built on Vimeo OTT’s API, but it was our own product. We employed something like eight sophisticated engineers at IAC to build our own product around it, and it was brutal. Which is to say, it’s just very hard to do very well. And these were great engineers.
https://www.theverge.com/podcast/781331/hank-green-sam-reich...
And Criterion :(
Wonder what this means for vimeo/psalm, the static analyzer for PHP, which has recently seen some new life breathed into it after long neglect. Psalm has credible alternatives in PHPStan and now Mago, but it would still be a loss to see it go unmaintained again.
Psalm creator here!
Vimeo has not contributed any code to Psalm since I left in 2021.
Psalm is still in good hands!
Can someone in the know explain Bending Spoons?
I routinely see job postings by them in my local dev circles, significantly above market rate, and the offers seem to keep reappearing forever. Their site namedrops known apps and services like wetransfer but otherwise seems to be just buzzwords.
Are they VC buying existing IPs? What is exactly going on?
Hundreds of millions in revenue and three acquisitions in 2024 — what’s behind Bending Spoons’ success? | Sifted https://sifted.eu/articles/bending-spoons-italy-startup-ipo
So private equity is behind it.
Yeah, but AFAIK that means people buying companies, leaving them with a skeleton crew and milking the remaining users as long as possible.
How does that fit with expensive hiring sprees? If anything I’d expect them to be continuously shedding absorbed employees.
They hire at higher pay because they want people that can/are willing to do the job of multiple people
And often at places cheaper than US talent, so that above average pay in the EU comes out to below average pay overall.
I guess that companies which get bought might be a bit "overstaffed" from the startup phase or because planned further development. If one removes this staff, you need less people to minimally maintain a running app. But itcs just a guess, you'll loose knowhow too, when drastically reducing your staff.
Being a part of that skeleton crew likely involves different skills to building the product in the first place.
I describe Bending Spoons as an Italian private equity company. The CEO openly admits that the business model involves buying companies and trying to squeeze as much profit out of them.
They are private equity, which is where your company ends up if they fail to 10x and/or go public
4 months:
Bending Spoons acquires Vimeo for $1.38B https://news.ycombinator.com/item?id=45197302
This comment from e98cuenc seems extremely prescient.
> Everybody loves to hate BendingSpoon, but there is a lesson here. They consistently rewrite the code of their acquisitions with a tiny team, fire everybody and are able to maintain and improve the product. They basically skip everything but engineers, and they are kept at a minimum. Feedback from users is the products they take over 1) become more expensive, 2) they ship features waaaay faster. It looks like next generation private equity, and my guess is more houses will start copying them
Considering what Bending Spoons did to Meetup.com after buying the site, I wouldn't trust them to improve a product. Here are some of the issues I noticed.
- Group searches consistently return irrelevant results across multiple cities. As a test, I tried searching for soccer groups in Dallas, Texas, and one of the results was for a backgammon group. Users will also often have a hard time finding events I host on Meetup. - An organizer being charged $357.98 per year to host a group on Meetup.com. - The pages for my Meetup events are full of clutter and duplicate data, while relevant information such as RSVPs is hidden. - My Meetup.com home page is full of pointless distractions, including a banner asking me to become an organizer when I already organize events. - When editing an event, Meetup shows an option to generate a description by using generative AI. Generative AI is a scam and I try to avoid it.
That being said, you are right that they are becoming more expensive and ship features faster. I describe Bending Spoons as Italian private equity.
As a heavy Meetup user, I can say that Bending Spoons absolutely fixed some glaring, long-standing bugs. But their massive price increases have really driven people away, and some of their attempts to grab more money (Meetup+) really rankled a lot of people. Also, search still sucks.
This is why "running lean" for a B2C business is never something to take as a good sign from the consumer standpoint. Let alone the client. Those savings are not being passed to you, quite the contrary. they will in fact have their care and eat it by trying to throw more costs at you despite the supposed lower overhead.
I'm discovering Bending Sppon withn this thread, and I think they really got their business right. I hope they IPO soon
I'm not privy to support, as another reply put it, "Enshittification as a Servce".
And this is just modern private equity. The whole point is to avoid all those pesky regulations going public brings.
Honestly, I wish more businesses would do this. It turns out that grandiose dreams make grandiose staffing, but a lot of great business ideas would thrive and bloom if the gardeners would just prune them back more often.
The part about "they get more expensive" makes me actively not want this, despite otherwise being someone obsessed with optimization. I'm not here to optimize billionaires' pockets at the expense of the people I actually make the product for.
I don’t understand the basis for your hostility here to charging more money and making a profit, especially given that Hacker News is founded and run by a venture capital firm whose goal is repeatedly that in hundreds of attempts at once. At minimum, Vimeo should have been raising prices by inflation% per year, and I’m pretty sure they weren’t doing that. Better the platform continue and thrive doing what works than founder uselessly on the zero-price pivot shoals like most startups these days. And there’s a sense of cosmic irony that both Vimeo and Dropout are now run by a very small team rather than a large one. Perhaps Vimeo will learn the lesson of Dropout and switch to the boring but effective 100% paying-customers-only model that other successful businesses use. I’m rooting for them.
Enshitification As A Service (EaaS)
Actually the acquisition was closed on November 24th, so it was just in 2 months
Wonder how many of these people were still at the company: https://vimeo.com/173714
I just realized that video is old enough to vote.
The people in this video were mostly CollegeHumor people (I think there are 4 Vimeans in there), but the last one left about 10 years ago now.
Komoot gets shittier every week too. Takes way too many taps to plan a route, search still sucks, "go premium" in your face all the time.
I just cancelled my account that I've had for about 10 years... maybe longer. I barely used it, but it's now >$100/year for my plan. I had maybe 15 videos uploaded that I would share occasionally.
I used to be an indie filmmaker and used it to host features when nothing else could. I’ve been paying since 2008. The price would go up but they were great so I let it be.
I guess I’ll be exporting everything today.
This is actually my favorite Vimeo video of all time. I wish they would have made a TV show. This was just the pilot, but it's hilarious.
https://vimeo.com/86146321?share=copy&fl=cl&fe=ci
The client review capabilities was pretty nice when I used it once. It's not that the feature stopped working, but after COVID I had to pivot career.
An interesting aspect is that they acquire US companies, where it is legally possible to lay off employees. In Italy, where BS is based, firing employees is much more difficult
They acquired European companies in the past and did similar things (e.g. Komoot). They are in the process of acquiring Eventbrite, where a big part of the workforce is located in Spain, and the feeling is that they are going to do the same there.
It will probably take more time due to legal processes and severance packages may be better, but I don't think this is going to stop them, let's see.
What is Vimeo for as compared to YouTube or self-hosting video files?
Our business uses Vimeo because we get a discounted rate on acami CDN via their bulk purchasing power. YouTube is free but that comes with a lot of headaches. For example not being able to hide the recommended videos at the end of a video, which annoyed our clients in the past when we did use YouTube. YouTube also needs to be public to be embeddable, which also created issues for us. However this announcement has me terrified and literally scrambling for a backup plan.
Youtube also doesn't let you replace an already-uploaded video while maintaining the URL, which is incredibly painful if you need to edit a posted video for whatever reason.
If it's a small number of videos, specifically ones that are unlikely to go viral, then a self-hosted or externally paid hosted peertube site might be a good option.
Similar boat. Would appreciate hearing of options you end up considering.
We are probably just going to self host. We already self host several TB of images (proxied by CDNs) we are just going to do the same with our videos. Most of our videos are only watched for a few weeks before they are basically never viewed again. Our plan is currently to use backblaze for the older stuff their b2 storage is pretty affordable. Proxied by another server and a CDN so the popular stuff sits on the CDN and the older stuff is accessible but might take a few moments to bring up. This is acceptable to our business model.
Vimeo you manage your brand and presentation. YouTube you have little control over where or how your video is presented. Vimeo also provides VOD for some large brands and media companies.
Yeah, it's this. It's a hosting platform, not a social media platform. You see a ton of people who have short films, art projects, commercial portfolios and stuff like that hosted at Vimeo. They don't need/want comments, discoverability, or to deal with things like automated DRM takedowns. Clean, simple, video hosting.
I built my own course presentation platform (for my own courses, not as a thing I resell), but I wasn't going to host my own videos. I use Vimeo. It's great: I upload to them, embed an iframe, job done. I don't care about maintaining a video player or bandwidth or subtitles or…
Literally the week after I launched my thing, they got bought. I have no idea what I'll do if they go to shit.
This is the Bending Spoons model: acquire companies that have some core user base and traction with VC money.
Lay off the entirety of the staff. Focus on price modeling.
Depending on the particular software they may or may not invest some internal engineering in keeping the money flowing.
Rinse and repeat.
Italian LinkedIn hails them as one of the most innovative companies, whereas to me they seem to fall in the butt cigar business.
I was planning to use Vimeo for some video hosting... I guess I'll have to self-host now. Oh well. At least this happened before I actually committed to buying a plan or even creating an account. With private equity poisoning the well like this I'll probably be better off hosting my videos in AWS; doubt anybody will be buying them anytime soon.
Try Bunny Stream, really super simple and affordable
Yes bending spoon will stop growing these companies and stop add features. These role will be just replaced by engineers and employee in Italy, where bending spoon is form, and where people cost many times less than in the US. Italy is like a higher quality India in a sense.
Bending Spoons pays very high rates for their own engineers.
Of course if your comparison is Bay Area or Zurich, there's no match, but if you exclude such outliers (where the compensation is what it is due to the insane costs of living and competition for talent) they are paying rates higher than pretty much any other part of the world.
They pay rates that are closer if not higher than London or Munich averages (which are very high).
> Italy is like a higher quality India in a sense.
It's attitudes like this that rub decisionmakers who aren't of European heritage the wrong way.
Italian tech salaries [0] aren't significantly different from Indian tech salaries [1], especially in major hubs like Bangalore [2].
If companies like Google [5], Broadcom [6], and Nvidia [7] can afford to pay EU level salaries in India and decided to heavily invest in hiring in India, it shows that Indian talent can't be underestimated.
Also, a European dismissing Indian engineering quality doesn't bode well as your governments that are signing an FTA [3] and a security and defense partnership [4] with India in a couple days, and with the Italian government soliciting Indian capital for infrastructure investment [8] and the French government soliciting Indian capital for defense [9] and infrastructure [10] investment.
[0] - https://www.levels.fyi/t/software-engineer/locations/italy
[1] - https://www.levels.fyi/t/software-engineer/locations/india
[2] - https://www.levels.fyi/t/software-engineer/locations/greater...
[3] - https://www.reuters.com/world/india/eu-nears-historic-trade-...
[4] - https://www.reuters.com/world/india/eu-proceed-security-defe...
[5] - https://www.levels.fyi/companies/google/salaries/software-en...
[6] - https://www.levels.fyi/companies/broadcom/salaries/software-...
[7] - https://www.levels.fyi/companies/nvidia/salaries/software-en...
[8] - https://www.lagazzettamarittima.it/2025/10/30/rixi-in-india-...
[9] - https://www.frstrategie.org/publications/defense-et-industri...
[10] - https://fr.euronews.com/business/2025/07/03/limec-deviendra-...
i have made https://codekeep.io for storing snippets, have similar features to evernote. all users will get free pro membership now. if you are thinking about moving , please consider codekeep too.
Vimeo’s prices are insanely low for what they’re offering. You could not host on AWS and match them on price, nor probably even Hetzner. I never knew if they built out custom infrastructure or if they’ve just been losing money this whole time.
Lots of custom infrastructure. A bit of losing money as well, but moderately profitable on the whole. They were a publicly traded company in their own right from 2021 to 2025, so you can look at the 10-Ks. There was a massive boost in business from COVID in 2020 and early 2021... which meant that the spinoff in May 2021 left investors in a position to be perpetually disappointed, sort of like Peloton.
The spinoff definitely came at a particularly bad time, but that was always how it was going to end up because that is how IAC operates. Vimeo was probably doomed from the moment IAC acquired Connected Ventures. It was never going to be the kind of business that could really operate as a public company, but totally could have been a profitable private company.
The custom stuff was all on the transcoding and player sides. Actual video file storage and delivery was using a variety of well-known CDNs depending on when and where, but primarily Akamai.
This is bad news for streaming platforms like Dropout, that use Vimeo as their backend.
I was wondering what I used by this company because I saw the name yesterday. It's Harvest, and I was thinking yesterday how the sign up and pricing page seems more or less abandoned. Guess it's time to roll my own version
Why isn't Vimeo listed on the Bending Spoons website? https://bendingspoons.com/products
That lists 6 products, Wikipedia lists 13. I can only guess at the reason for deciding what to put there, but it does say
> Some of our most popular products
If anyone is looking for an alternative made in Germany: https://ignite.video/en
For all the valid criticism of Bending Spoon's business model, I'd like to raise another point.
They haven't extorted these companies from the previous shareholders and founders. They paid for those.
We talking about multi millionaires deciding to throw away their life's work, their customers, their teams to become even wealthier very well knowing what the fate was going to be.
But that crowd isn't even mentioned.
Bending Spoons did the same thing with Evernote. Laid off US staff. Closed their Redwood City offices and hired a dev team in Italy to take over.
Small correction, they didn't hire a dev team in Italy to take over. They are an Italian company with their own engineering.
Can someone give me some examples of private equity firms that aren't driven purely by avarice? I have a bet going with a colleague.
Your question doesn't really make sense. What business isn't driven by the goal of making money ultimately?
Non-profit organizations generally don't focus on profits, but they are usually classified as "businesses."
I suppose this is a matter of definitions. What do you define as a "business?"
What businesses are profit-driven? I would love to know so I can avoid them.
Every gas station, grocery store, convenience store, pharmacy, urgent care, every bank, every tech company, every computer manufacturer, most food production companies, most farms, every resource extraction company, every manufacturing company.
Any health care organization - from your list, pharmacies and urgent care - that is profit-driven is not holding health as top priority.
If an organization that should be focused on making people healthy is instead focused on how many currency units it can extract from other entities, there is (as they say) a misalignment of priorities.
Every nonprofit.
is it so different from founders (and founding team in a pyramid-scheme-like dynamic) that is looking for exit?
If you are an LP a their fund this is what you would expect. Hate the player not the game.
Not sure I understand the point as my switching cost off Vimeo is negligible apart from finding a competitor.
I once hoped Vimeo would grow to compete with YT, but that dream died long ago.
Anything else worth considering other than youtube (or self-hosting if scale isn't an issue)?
We are quite happy with bunny(.net) stream. Very affordable and easy to use
New definition of "bending over" haha
Was this name inspired by Uri Geller?
More likely The Matrix, but the whole "psychic spoon bending" thing was of course made popular by Geller.
What I've always found unusual (but not necessarily bad) about BS is ... how come a company that came out of nowhere starts buying tech companies here and there? Billion dollar deals? In cash?
It can't be just a few "enthusiastic" random guys (as they portray), you need a lot of capital to pull that off.
IMO they're someone's family office with an obfuscated name.
Edit: and my comment suddenly goes to the bottom despite having several upvotes ... definitely not sus.
They're a Milan, Italy company so don't get a lot of visibility in the US.
The founder recently went on invest like the best and explained it top to bottom, they started as a broke agency and grew from there quite fast. I forget the details but I would imagine they are financed quite heavily by LP's
https://colossus.com/episode/luca-ferrari-building-bending-s...
Someone has actual financial plan. I know a unknown thing for VC and startups. If they do and can calculate reasonable rat of return on acquisition it makes sense for lot of investors. Especially when they start to have proven record.
Having paying customers, stopping giving things away for free and then cutting costs like wages and moon shots projects. A software starts to be tech again. That is marginal unit costs really do work.
Hundreds of millions in revenue and three acquisitions in 2024 — what’s behind Bending Spoons’ success? | Sifted https://sifted.eu/articles/bending-spoons-italy-startup-ipo
Money laundering?
They expect to use AI.
Bending Spoons' playbook: acquire established product, gut the team, run it on fumes with skeleton crew + AI tooling. They did this with Evernote, Meetup, now Vimeo. Classic private equity move dressed up as a tech company. Extract value, minimize costs, ride the brand until it dies.
> Classic private equity move dressed up as a tech company.
Kinda, more like a tech company using private equity tactics. Say what you want about them, but they do actually employ decent engineers, and the founders are all engineers.
They seem to fundamentally understand the companies they are buying (not always the feeling I get with PE).
Their business model is a bit cynical, but I would still consider them a tech company.
I think it is good to understand tech company and then startup or VC company.
Tech company is company with marginal unit costs. Bending Spoons aims these and then optimize them further.
Startup or VC, search "growth" and user acquisition. Usually in something with marginal unit costs.
Just because someone stops spending money on chasing growth does not mean they still don't have unit economics of tech companies.
Thank you for reminding me I had an Evernote account. I just deleted it. Its been shit since Bleeding Spork took it over.
I was surprised to see BS bought Harvest back in July. Was very low key but rumors of large price increases already surfacing
https://news.ycombinator.com/item?id=46454175
Slack next?
This is typical of Bending Spoons. They make an acquisition, lay off as many people as possible, then start jacking up prices and putting features behind ever larger paywalls. They've got to start feeling the pain of user churn and attrition at some point, but not yet, I guess.
This is AGI.
The strategy is simple.
- Buy a product that has name recognition overshadowed by a monopolistic company and the leadership is trying to make a pivot and failing terribly.
- Leadership is aggressively rebranding to appease a takeover. They keep doing the most basic forbes council op-ed title moves to make the product appealing.
- It is not a parts-shop, the team is used to sense of "eh what you are going to do about it". It is a signboard and patents that you can use to hostage bigger companies.
- The takeover company has figured out maintenance engineering. You buy the product, you cull the team because they are not a growth engine. You focus on maintenance, and you milk the brand. Any eastern European or LATAM team can approve an automated version bump PR and send out "let's jump on a call" email.
Heck, even Tai fricking Lopez bought Radio Shack under similar pretense.