Daily Daze

Canned BuyWithMe Employee Says Company Died Because It Got Greedy

UPDATE: A source familiar with the situation says BuyWithMe founder Andrew Moss based layoffs on a list of employees he liked and didn’t like.

An employee of BuyWithMe who was laid off today, along with what he estimates to be about 55 percent of the staff, says the company went under because it got greedy.

“They were trying to raise a hundred million dollars at a $500 million valuation and there were no takers. If they had done a more conservative round, the company wouldn’t be in this kind of trouble.”

This employee says there is no hope of raising a round now and that the company is looking for a buyer. “They are hoping to just sell and get some of the value back.”

BuyWithMe had been on a buying spree itself, acquiring six companies in the last six months. “The only one they paid a lot for was Edhance. And that company is the only reason a buyer would be interested.”

The employee said people were expecting news around Thanksgiving, but today’s layoffs come as a big surprise. “We had no idea. They didn’t offer us severance or anything.”

Asked whether this was a reflection of conditions in the daily deal / group buying industry as a whole, our source demurred. “Nobody has figured out a profitable model yet, but if someone does, then maybe they could make it work.”

Follow Ben Popper via RSS.

Comments

  1. Anon says:

    What we need to realize is that in this case and in the broader industry, we must stick to what we’re good at. Getting leaner and renewing the focus of a company such as BuyWithMe can alot of times mean layoffs. Yet, scaling a business back down to maximize revenue is not a new concept. The daily deal model has been brought to the forefront of this discussion and although it is valid one, businesses and customers are coming together in new ways and we should keep learning from mistakes to figure out what works best.

    Instead of closing it’s doors in one fell swoop, it sounds like BuyWithMe is trying to maintain value.

    1. Anonymous says:

      It sounds like you’re one of the few who didn’t get shitcanned today.

      1. Guestie says:

        It sounds like he/she’s one of the few that did the shitcanning.

    2. AnonYourself says:

       What?  I read that twice and I have no idea what you’re saying.  A sales driven business does not “maximize revenue” by laying off salespeople, who must account for some of the folks laid off, if it really affected 50-75% of the employees.  There’s nothing wrong with saying, “we screwed up, we have less money than we thought, and our VCs are bridging us on the condition that we cut the burn, so we had to scale back our ambition and, worse, lay off good people for the business to have a shot at profitability.”  I’m speculating here, but at least be up front about it instead of just depositing a useless wad of double-speak.

  2. Anon says:

    What we need to realize is that in this case and in the broader industry, we must stick to what we’re good at. Getting leaner and renewing the focus of a company such as BuyWithMe can alot of times mean layoffs. Yet, scaling a business back down to maximize revenue is not a new concept. The daily deal model has been brought to the forefront of this discussion and although it is valid one, businesses and customers are coming together in new ways and we should keep learning from mistakes to figure out what works best.

    Instead of closing it’s doors in one fell swoop, it sounds like BuyWithMe is trying to maintain value.

  3. Jackahh says:

    I bet 60% plus of the company’s revenue comes from NYC and Boston, so cut cut out the excess expense, focus on the markets where they have good penetration (and revenue) and keep it going. Sounds like a good strategy to me. And I think their acquisitions were good ones too. 

  4. Other Anon says:

    This is the most ridiculous thing I have ever read.  To say that we were “blindsided” is complete load of crap.  No one at BWM is stupid, we all knew they were having trouble getting funding.  And did this week suck and was it incredibly upsetting? Yes, of course.  However, it is the nature of the start-up beast.  And to say that Andrew Moss made a list of people he liked and didn’t is absolutely crazy.  Andrew is a business man, he is not some high schooler looking to make himself popular.