
42Floors Lays Off Half of Staff as It Cuts Brokerage Team, Refocuses on Search - uptown
http://techcrunch.com/2015/03/03/42floors-layoffs-brokerage/
======
ripberge
I've heard the name 42Floors many times over the years as they seem to get a
lot of press for being a hot startup. For the first time, I just visited their
website as I'm in the market for some office space.

This product is pretty underwhelming. I was expecting something game changing
--on par with Redfin or Zillow. There's no maps, no ability to filter by zip
code or name of areas within the city of Los Angeles. Craigslist is actually
more advanced in several key ways. They've been working on this since 2011?
Where has that $17 million gone?

~~~
lmartel
I'm reposting a comment from `suckystartup` below that got tor-killed because
I think it illustrates your point well. From the 42Floors blog posts that pop
up so often on HN, they sometimes give the impression that they care more
about "startup culture" than about their industry or product.

\---

From
[http://web.archive.org/web/20140618142018/http://blog.42floo...](http://web.archive.org/web/20140618142018/http://blog.42floors.com/interviewing-
at-a-startup/)

    
    
        > Another quick story before I really dive into this blog post. We had a gentleman over to interview for one of our account executive positions at 42Floors. He had strong experience leasing SF office space: great resume, great cover letter, did well in our initial phone screen.
        > When he walked in the door, we could hear the clacking of his shoes on our hardwood floor. He was dressed impeccably in a suit that probably cost more than my first car and was carrying one of those leathery-thingys that seemed to exist only for the purpose of being carried during interviews.
        > I stole a glance to a few of the people from my team who had looked up when he walked in. I could sense the disappointment.
        > We’re all happily wearing blue jeans and sneakers. It’s not that we’re so petty or strict about the dress code that we are going to disqualify him for not following an unwritten rule, but we know empirically that people who come in dressed in suits rarely work out well for our team.
        > He was failing the go-out-for-a-beer test and he didn’t even know it.
    

I don't know where the $17 mil has gone but anyone working at a startup that
displays this kind of head-up-your-arse arrogance should expect layoffs. Maybe
if this company hired for skill and not for beer buddies it would have been
able to close deals.

~~~
smcl
I suspect the guy in the sharp suit realised he dodged a bullet as soon as he
read the blog post giving him a public dressing down.

I've heard a lot of stuff about the startup scene in SV, but honest question:
would anyone ever consider showing up for a job interview in anything more
informal than shirt-trousers-shoes? And if the interviewee in that showed up
to that interview in jeans/tshirt would the blog post have been different, or
was the interviewer just looking to pad it out with an interview\culture-clash
horror story and would we instead have been reading:

    
    
        > Another quick story before I really dive into this blog post. We had a gentleman over to interview for one of our account executive positions at 42Floors. He had strong experience leasing SF office space: great resume, great cover letter, did well in our initial phone screen.
        > When he walked in the door, we could hear the squeaking of his sneakers on our hardwood floor. He was dressed shabbily in a tshirt and jeans that he probably picked up off his floor five minutes before heading for the interview...

~~~
lmartel
You absolutely can get away with jeans and a tshirt at an interview in SV;
it's what I usually wear, and (anecdotally) what seems to be the norm. "SV
culture" weirdness aside, dressed-down interviews for non-client-facing work
makes perfect sense to me.

That being said, if someone either isn't aware of the custom or prefers to
interview in a suit, it's idiotic to count that against them.

~~~
lazyjones
In my only ever job interview in the US, I was told beforehand to dress
casually for my visit to their office. I'd expect that kind of preparation to
be routine for professional HR people.

The attitude displayed by startups seems indicative of their arrogance and
overconfidence after being given money for their "great" ideas...

------
wwwong
I met this team a while back. All good people, very smart, but unfortunately
seemed more focused on being a silicon valley startup than building a business
in commercial real estate. As indicated by the topics discussed on the site's
blog...

------
pdq
Jason has a blogpost on this today: [http://blog.42floors.com/back-to-our-
roots/](http://blog.42floors.com/back-to-our-roots/)

------
gaius
Previous discussion of these guys
[https://news.ycombinator.com/item?id=7930430](https://news.ycombinator.com/item?id=7930430)

------
deedubaya
Man, I feel bad for these people who were hired on for an experiment just to
be dumped after a few months. That sucks.

~~~
austinlyons
This "our idea didn't work out, so we are letting you go" probably happens
more than we realize. Props to Jason for being open and honest about it.

~~~
enjo
I've been in startups for about 15 years. One of the hardest things I've had
to do was lay off 4 people we had just hired a month earlier.

One of our partners had agreed to terms on a project that required us to staff
up. When the project fell apart on their end the whole thing was cancelled. We
just didn't have the budget at the time to keep those people on.

It absolutely sucked. We tried to be generous with severance.. but these were
people who had just turned down other jobs to take this one. We just kind of
dumped them back into the market. It absolutely sucked.

I vowed then and there to never hire people unless I was absolutely positive
the money was in our bank account.

~~~
lucaspiller
This is one of the advantages of hiring contractors. They are used to the pump
and dump, and if you really like them you can negotiate a longer term or
permenant contract.

~~~
keithpeter
In the slightly stodgy public sector organisations I work in, using
sessionally paid teaching staff to cover increased workloads is normal. If the
workload increase becomes permanent, you can then advertise an established
post. Seems prudent.

Perhaps as someone round here suggested some time ago, you should treat these
companies as film projects. A group of freelancers get hired in to complete a
project then when their work finishes they go on to the next project?

------
free2rhyme214
Startup culture - check!
([https://42floors.com/team](https://42floors.com/team))

Startup success - uncheck!

------
Lambent_Cactus
Is there a standard synecdoche for the type of tech company that's better at
'thought leadership' than at its actual business?

~~~
mathattack
I used to think that was Joel on Software, but then he did StackExchange. It
was as if he was preparing his whole life for that.

~~~
bobofettfett
Trick is: Stay long enough in the game, earn enough money to stay afloat, then
find the gold at the end of the rainbow. Expose yourself to luck.

~~~
mathattack
Indeed. And he was very selective and disciplined about what he chose not to
do.

Many gurus are bad businesspeople. (What makes them a good guru contradicts
the nuts and bolts of running a company) I'm glad to see how well he's done.

------
dropit_sphere
Too bad. I interviewed with these guys and have nothing but good things to say
about them.

~~~
woah
Did you bring heirloom carrots?

------
mathattack
17.4 million in investment can't maintain a staff of 28? What are their big
expenses? Or is it more of a strategic redirection? I like a lot of what Jason
Freedman writes, though I don't have much experience with them as a company.
Based on their public profile, I suspect this will get a lot of PR.

------
georgebonnr
The search on the homepage is confusing to the point of seeming broken. I
clicked 'Areas' and selected a few different neighborhoods in SF. Nothing
happened. Clicked away. Nothing happened. Clicked the out-of-the-way, 'search'
button (which was confusing because it was too wide to be a button and looked
almost more like its true calling life was to be an input field). I don't
think anything happened? Closed page.

~~~
skuhn
It did do something when I clicked the Search button, but the design is indeed
a total mess.

The generic header image that makes it look like a domain squatter's landing
page certainly doesn't help. And a phone number in a prominent position at the
top of the page, very Internet savvy.

------
tswartz
It's disappointing to see the layoffs, but I think its smart of them to stick
with the core focus of providing excellent listings for office space. There
are a lot of costs ($$s and energy) associated with doing business as a
brokerage company and for a small startup it makes sense to focus on one thing
first. Perhaps they will be able to add the brokerage arm once they've proven
out the search side.

~~~
davemel37
I suspect this is less about focus and more about conflict with other
brokerage houses. Most commercial real estate is owned by an owner-broker who
syndicates a deal and primarily makes a good portion of his money off closing
the sale, property management and leasing...

In other words, the people they depend on for the listings probably had no
interest in sharing leasing fees with them...but are thrilled to be able to
list and even pay a premium listing fee.

Focus is the right buzzword for them to spin this...but my bet is that they
shot themselves in the foot when they decided to compete with their users.

------
dec0dedab0de
I seriously didn't realize they were a company. I thought it was just a blog
that ended up on hn sometimes.

------
leroy_masochist
I’m late to these comments which is too bad because reading this makes a few
questions come up in my mind and would love to hear others’ thoughts:

1\. As a founder, how does one balance one’s evangelical passion about the
product/mission with the responsibility one has to explain the risks of a job
to new employees? Should one just be super passionate and expect the employee
to have a “caveat emptor” approach, or is there a minimum threshold of kimono-
opening one should do in order to advise potential hires of the riskiness of
both the market generally and one’s startup specifically?

2\. In the case of the people who were fired from 42Floors, being a good
broker is a very fungible skill and is relatively agnostic of firm
affiliation; either you’re good at selling real estate or you’re not (compared
to, say, being a good designer, where a given individual might be excellent in
one role and terrible in another, depending on team and mission). Anyway,
question is: when hiring employees with fungible, broker-like skillsets, is it
appropriate to be more — I don’t know what the term is, risk-tolerant,
freewheeling, forward-leaning, etc — in deciding whether it’s appropriate to
hire a new person? The logic here being that if things go bad (as they did at
42Floors), those people will be able to land on their feet relatively easily,
compared to others who are going to need more time/effort to find a new job.
3\. If you have raised a lot of money and have cash in the bank, and lay off
an entire division of people, what is your obligation to give them severance /
extended health care / etc? My inclination would be to be very generous in
this regard (i.e., firing good people who had to be fired because I realized I
made a mistake hiring a bunch of people with their skills, not them
specifically), mainly on a moral basis rather than a reputation-saving one.
However, does doing so make one look weak in the eyes of the Valley VC
community? Say you gave everyone something generous, like 3-6 months of
severance….would it be hard to raise money later because investors think you
don’t have a hard enough heart to run a profitable business?

I know this is a relatively stale thread and not a lot of people watching, but
very interested to hear thoughts on this.

------
snarfy
Pivot. I believe the next step is to try to acquire a second round of funding.

------
ulisesrmzroche
Have any of you ever seen "Rejected" by Don Hertzfeld? This reminds me of that
one scene with the happy clouds.

------
bketelsen
is it 21Floors now? <bring forth the downvotes>

~~~
markcerqueira
No jokes allowed on HackerNews. Only serious and totally informed discussions
by people who have clairvoyance levels over 9000...

~~~
JetSpiegel
But if they worship sinking businesses like this, doesn't that debuffs their
levels?

------
davmar
the CEO has to make the tough calls. it separates the men from the boys. kudos
to jason for making those decisions.

~~~
bigethan
That's a nice Kleiner Perkins outlook you've got there.

~~~
davmar
just in case i'm misunderstood - i'm simply suggesting that he must have
struggled intensely with this. it hurts him and he could drag the pain on and
not face the music that he made a mistake. instead, he faced his mistakes head
on and set a clear direction for his company.

it really sucks short term for the employees. but it sets them free and it's
in their long term best interest too if they'll end up learning more and being
more successful elsewhere.

so i give kudos that he didn't take the easy route of letting the mistake
continue, looking in the mirror and waking up to a very difficult day.

