Frankenstorm

Hurricane Sandy Ruined Every New York Tech Party

Cheryl Mills (Photo: Wikipedia.org)

A lot of startups are letting their employees work from home for the next few days because of hurricane Sandy. That’s all swell news, but those members of New York’s tech scene who were supposed to go out and party or sit through conferences are screwed. Tech events are getting cancelled left and right, though some scene luminaries don’t seem to mind.

AllThingsD’s “D: Dive Into Mobile” conference has been postponed until a later date that will be announced as soon as possible. The event had originally been set for tomorrow and Tuesday in New York City. If you booked a room at the Ritz Carlton (looking at you, VC’s), the hotel is apparently giving full refunds and waiving cancellation fees. Speakers like Pandora CEO Joe Kennedy and Hillary Clinton’s Chief of Staff, Cheryl Mills, will just have to wait until another day to make their speeches. Read More

Shakeups

Report: Gilt Puts Jetsetter Up for Sale at Around $50 Million [UPDATED]

Mr. Ryan (Photo: Invoke Media)

After a tumultuous spring that led to staffer mutiny and the ouster of CEO Drew Patterson, Gilt Groupe has decided to put its travel site up for sale, according to sources who talked to The Wall Street Journal. The Journal reports that the company has been shopping around Jetsetter for the past few weeks with an asking price around $50 million, but so far no interested bidders have taken the bait. Read More

The Media Elite

The Rise and Fall of New York Founders on Vanity Fair’s ‘New Establishment’ List

photo (1)

Annie Leibovitz’s Silicon Alley photo shoot has finally made its way into print, as part of Vanity Fair’s annual “New Establishment” list. As we’d hoped, the magazine opted to pose Arianna Huffington in the sidecar of David Karp’s vintage motorcycle. (Guest appearance by Mr. Karp’s “French-English bulldog,” Clark.) Only in the version that made the October issue, Dennis Crowley is depicted emerging from a manhole, avec le swag. As before, the annual list is chockablock with tech types, but just like last year, Silicon Valley dominates.

Peter Thiel comes in at no. 37, repping for libertarian utopias between Tyler Perry and Ryan Seacrest. Elon Musk is no. 9 on the list, two rungs higher than Adele, but one spot below a new entrant: Pinterest’s Ben Silberman, no. 8. Despite Square’s caffeine-fueled growth, Jack Dorsey stayed at the no. 5 spot, but finally got the fashion props he’s been waiting for. “It’s a Prada suit; for everyday wear, it’s denim from Scott Morrison’s Earnest Sewn line, which was the first brand to use Twitter.”

Scattered among the elite are a handful of New York techies, present and accounted for. By and large, it’s the same group of people as last October, although it’s interesting to note how Vanity Fair assesses their power ranking, year-over-year. Read More

Shakeups

Kevin Ryan Asks Jetsetter CEO Drew Patterson to Step Down After ‘Mutiny’ From Staffers

Mr. Patterson via @jetsetdrew

Gilt Groupe founder Kevin Ryan and chairman Susan Lyne spent Monday at the offices of Jetsetter, a deals site for luxury travel that operates independently under the Gilt Groupe umbrella. When the day was done, the Jetsetter board, where Mr. Ryan serves as chairman, approved a bold decision in response to an exodus of six senior executives and pervasive frustration among Jetsetter’s nearly 90 employees. “More than half of us are looking to leave within the next month, at which point the business won’t be operational,” a Jetsetter employee told Betabeat last week, recounting “mutiny” among staffers.

“Drew [Patterson, the company’s CEO and cofounder] is going to step down effective immediately,” Mr. Ryan told Betabeat by phone this morning. In his stead, Mr. Ryan named Rob Deeming, Gilt Groupe’s director of strategy and operations, and Mr. Ryan’s former “chief of staff,” as acting general manager of Jetsetter. Mr. Deeming had been in charge of Jetsetter’s UK office, which was launched last September.

Mr. Ryan said the change at the top was motivated by turnover and morale. “Too many people have left. When you’re the CEO, you’re responsible for that. We’ve had a lot of communication over the last six months on this issue. At a certain point, for myself, you make a change.”

Interviews with staffers, who spoke under condition of anonymity last week, painted the picture of a company hampered by Mr. Patterson’s and CTO Colin Kroll’s unwillingness to listen to and implement other people’s ideas–at the expense of employees eager to grow the brand. The initiatives that the duo had put forward, such as a UK office, had flopped, sources said. “They talk to themselves and they think they’re smarter than everybody, but they don’t know how their customer works,” said another Jetsetter staffer, referring to Mr. Patterson and Mr. Kroll. “We have great members, we want to keep them happy.” Read More

Daily Daze

Flash Dance! Luxury Flash Sales Sites Regroup After Layoffs

kevin ryan

Around 4 p.m. on a recent Thursday, all but 14 of the employees of the members-only luxury e-commerce site Lot18 got an email asking them to report to the new conference room for an urgent meeting. The remaining employees, including the vice president of operations and director of operations, received an almost-identical note but were asked to report to the “alt” conference room instead. They were told they were being let go, asked to leave the building immediately and instructed to return on Saturday to clean out their desks.

The survivors were shocked by the layoffs, which came a day earlier than planned due to inquiries by Betabeat. Lot18, which started with private sales for wine before moving into full-price wine and epicurean deals, has raised a total of $44.5 million from investors—its latest round spearheaded in November by the highly regarded Accel Partners. Lot18 also moved into a new office over the summer that features a tasting room, mounted LCD screens that pop up a buyer’s location on a map every time Lot18 sells a bottle and a permanent DJ booth. In its one-year existence, Lot18 launched several new verticals, bought Paris-based e-commerce site Vinobest, and announced a foray into Europe.

To industry insiders, the scenario sounded familiar. Mass flash sales—deep discounts that expire usually after one to three days—had been touted as the first real innovation in e-commerce in years, and start-ups that applied the flash-sales phenomenon to the luxury market had investors salivating. But the former venture capital darlings suddenly seemed to be hemorrhaging employees. Earlier this month, another site, Boston-based Rue La La, slashed 60 of its 550 employees after months of growth.

Suddenly, the question is being asked: Could flash sales for the well-to-do wind up being more of a marketing gimmick than a business model? Read More

Metablogging

Wife of New York Senate Hopeful Marc Cenedella Is No Stranger to Blogging Controversy Herself

Brian Dorsey Studios via nytimes.com

Sen. Kirsten Gillibrand roundly admonished TheLadders CEO Marc Cenedella yesterday following a New York Times story about content pertaining to women, sex, and drugs on his personal blog—or at least a blog that featured a giant photo of him and the tagline “The personal blog of Marc Cenedella.” As politics wonks will note, Mr. Cenedella, an anti-tax activist, is a likely Republican challenger to Ms. Gillibrand’s seat in the Senate.

A spokesman for TheLadders quickly responded that the posts in question, such as one that advocated for a holiday where women offer free oral sex along with a steak dinner, were not actually written by Mr. Cenedella, calling it a “staging site [that] contained testing content from a wide variety of sources, including spam from automatic spiders.”

Nonetheless, it wasn’t the first time that the Cenedella family has been in the news for its personal blogs. A source informed Betabeat that Mr. Cenendella’s wife Angela Cenedella, née Angela Kim, is the author of the popular lifestyle blog Vie Society, known for its unapologetically girly take on the luxe life and coining terms like “moopig” and “amazeballoons.Read More

Daily Daze

Layoffs at Gilt Groupe Complete: 90 Employees Let Go, Gilt City Closes Offices in Six Markets

gilt_groupelayoffs

Gilt Groupe’s 900-some employees can rest easy, for now. In response to questions from Betabeat, the company confirmed this afternoon that the recent spate of layoffs is over. CEO Kevin Ryan initially estimated that about 50 people would be let go, however, the total number of layoffs across Gilt Groupe’s businesses “ended at 80-90.”

In a statement, the company said, “We don’t foresee additional layoffs at this time.”

Betabeat heard word Friday that part of the restructuring would involved shutting down certain markets for Gilt City, the company’s location-based deals service that offers discounts on luxury events and experiences. In the statement, Gilt Groupe confirmed that it will be closing its offices in six secondary cities “effective immediately,” namely San Diego, Houston, Philadelphia, Seattle, Dallas, and Atlanta. “We have not been as successful in smaller markets and the resources they require take away from growing our core business,” the company said.

Prior to this move, Gilt City operated in thirteen markets, so this represents a significant reduction. Going forward, Gilt Groupe said it will be “servicing those smaller markets through a centralized sales force.” Read More

Daily Daze

Layoffs Underway at Gilt Groupe Right Now: ‘General Atmosphere Is Terrifying’

Gilt-Groupe

Last Wednesday, Betabeat broke the news of impending layoffs at Gilt Groupe. Later that morning, CEO Kevin Ryan downgraded the estimates we had heard, telling AllThingsD that the company intended to “selectively trim” about 50 people from its staff of 900 over the next couple months.

Tipsters have written into Betabeat that some of those layoffs are currently underway. “People leaving. Sadness. Super uncomfortable work environment,” said one source who wanted to remain anonymous, adding, “General atmosphere is terrifying.” Read More

Daily Daze

Layoffs and Restructuring at Gilt Groupe as New Verticals Fail to Deliver Growth [UPDATED]

Gilt-Groupe

UPDATE: Gilt Groupe has not returned requests for clarification or comment, but responded via AllThingsD this morning.

CEO Kevin Ryan told the blog: “We are not closing down any businesses. We are not closing down Gilt Taste, and we aren’t merging Gilt City and Jetsetter.” Mr. Ryan also said, “In its fifth month of business, Park & Bond did more revenue than any other business in its fifth month,” although he did not say by what metric. He added that President John Auerbach is still employed at the company for now. But, he noted, there was a chance some of its top 15 executives may leave. (Chief Marketing Officer David Zucker left the company in July and Chief Product Officer Stefan Pepe left the company in June.)

Mr. Ryan did, however, tell AllThingsD that Gilt expects to “selectively trim” staff by about 50 over the next couple months, but claimed that by the end of March the number of employees would be larger than it is now. Gilt Groupe, he said, is on track for an IPO, possibly at the end of the fourth quarter, but mostly likely in 2013.

As for Gilt Taste, Mr. Ryan claimed that the site would need fewer staffers despite “doing great.”

Business Insider, where Mr. Ryan is chairman, has also confirmed impending layoffs of 50 to 60 people within the next week or so. According to Business Insider’s source, five to six percent of the company will let go across various departments in order to get cash-flow break-even by the second quarter of 2012.

Here is our original post:

Since Friday Betabeat has been hearing rumors about impending layoffs at Gilt Groupe. Late Tuesday night, a second source familiar with the company told us that the layoffs would happen on Wednesday and might be as high as 170 employees. We have reached out to Gilt Groupe for confirmation and will update the post as soon as we hear back.

The accounts vary, but both sources also point to restructuring within the company. One source said Gilt Taste, which hired former Gourmet editor-in-chief Ruth Reichl as editorial director last May, is expected to function at half its current workforce, with the remaining staffers funneled into other open positions in the company. Another source speculated that Gilt Taste was likely to be shut down.

Betabeat also heard that Gilt City and Jetsetter, which overlap in the high-end travel market, will merge. In October, Gilt City, which has a partnership deal with Google offers, acquired the daily deals site BuyWithMe, which itself suffered from big layoffs in the crowded deals space. Read More

Manners

Poaching Etiquette: As Talent Tightens, New York Startups Try to Stay Civil

(Illustration: Oliver Munday)

You can feel the love in Silicon Alley. The city’s tech scene is a brotherhood of mutual admiration and support. “Proudly Made in NYC” proclaims Meetup’s website; “Hatched in NYC” notes Aviary’s. Founders wear each other’s company T-shirts and tweet each others’ releases. They made “We Are NY Tech” buttons for South by Southwest and wore them proudly. Once in Austin, Betabeat asked the Bay Area superangel Dave McClure about the city’s tech prospects. “New York needs to stop smelling its own farts,” he said.

Yes, on the record.

Still, it turns out there is a limit to camaraderie. When it comes to hiring, especially in a competitive market, the shivs start flashing. Of the 184 startups that have “Made in NYC” emblazoned on their websites, no fewer than 130 are staffing up. That means if you want to build a startup, you’re going to have to poach some devs.

Slideshow: New York’s 20 Most Poachable Techies >>

Engineers don’t hop around in New York as much as they do in Silicon Valley, where noncompete contracts are unenforceable, but the city’s congenial entrepreneurs are raiding one another’s employees with increasing frequency. Before GroupMe was acquired by Skype for about $80 million, the well-endowed group-texting startup plucked developers from Gilt Groupe, Pivotal Labs and College Humor. The CTO of the fast-growing Betaworks startup Chartbeat, Kushal Dave, jumped to Foursquare in July 2010; the Union Square Ventures-funded Shapeways snagged Signpost’s former tech director a few months ago.

But startups don’t just compete over technical talent, which is in famously short supply. Thrillist nabbed Gawker’s Richard Blakeley to manage content strategy in March, and Crowdtap snatched marketing whiz kid Ben Kessler from SeatGeek in September. “We’ve hired about 500 people in the last 12 months,” said Kevin Ryan, the founder and CEO of Gilt Groupe, who still personally interviews every candidate. “They all have to come from somewhere.”

And while some take the Machiavellian view—“Is there any etiquette to that? I thought all’s fair in love and war,” said Lean Startup Machine founder Trevor Owens—most startups do observe certain gentlemanly guidelines. The unspoken rules of poaching are fairly clear cut. Don’t poach from early-stage companies you share an investor with. Get your investors involved if there is a possibility of taboo intraportfolio hiring. And by all means, keep your friends out of it whenever possible if you ever want to show your face at Tom & Jerry’s. “Never poach from close friends or people you know pretty well,”  said Jason Baptiste, the swaggering, crew-cut-sporting CEO of OnSwipe. “That’s a cardinal sin.” Read More