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I worked on Otto's server side software as a contractor for five months. The company had some servers written in C and exchanging messages using a custom binary protocol, designed for millions of transactions per second, when they needed only 2-3tps, readability, and the ability to make fast changes. We rewrote those servers in Go, found and fixed consistency errors in them, and actually got to the point where you could understand the code and deploy changes to it in hours, in other words, we delivered in a big way on what they asked us to do.

The company did not have the money to pay its bills for at least two months before shutdown, finally laying everyone off on December 12. There was nothing to indicate they didn't have money to pay us before then. I probably won't see a dime for the last two months of work. Other contractors took bigger hits than me. In total Otto owes hundreds of thousands of dollars to contractors for work already performed.

I'm beyond upset at the recklessness of the management and the board in this situation. They could have laid off the contractors in October when they realized they did not have enough money to pay all liabilities. They could have explained the situation and offered a bonus in the event of a successful exit.

Instead they said nothing about their insolvency, continued having us working on the (implicit) assumption that they could pay us, and continued gambling with invoices owed to me and other contractors.

If I ran my own company this way, if I just lost customer data or wrote broken code, I would not be in business for very long. Yet in VC land, the board (Reid Hoffman, Josh Elman, Sam Jadallah) will just go to the next venture.

I'm in a hole and looking for work in January, if you or your company needs help. I'm also happy to pass on the names of the other contractors who are getting 86 cents on the dollar for their work in 2017. https://burke.services




In the UK, the situation you described is called 'wrongful trading', and company directors can be held personally liable: https://www.icaew.com/archive/library/subject-gateways/law/i...

Is there any similar thing in the US?


As I understand it, not really, unless management or the board were freely mixing personal and company assets, for example using a company credit card to pay personal expenses. No evidence that took place here.

Reading the law at the link, it says you’re only liable if there was no “reasonable chance” of avoiding insolvency. The sale they were pursuing would have provided enough cash to pay debts so I don’t think it would even pass that test. Poor management is not a crime, unfortunately.


I wonder whether directors' salaries were paid whilst contractors' invoices were overdue.

Also, does the company have any assets? Even it's out of cash then, unless it's filed for bankruptcy/insolvency/administration (I think it's called 'chapter 8' in the US?), can't you still file a small claims court case?

Maybe get some Aerons in lieu of cash?


Small claims doesn't get you anything if there's nothing to claim. Sure I could get chairs but I could also just go back to work and make the money back.


Thank you, Kevin, for everything you did.


Even if we assume that your code is infallible and that Go is a good choice for this purpose, a ground-up rewrite of the core service by an outside contractor with ~4 years of experience five months prior to launch is a pretty clear sign of absolute desperation amongst the upper echelons. It truly, truly sucks that you got bit at such a horrible time and it's virtually impossible that any part of it was your fault, but I don't think you can say there were NO signs trouble was brewing. The fact that they were bringing contractors on board that late in the game to bail them out of the holes they spent 3 years digging is one big flashing "DANGER" sign. Then there's everything else about the product...

My absolute sincerest condolences, but it sounds like you might have made a couple rookie mistakes, too. As entertaining as hearing these insider tales might be, please don't add getting sued for breaking an NDA to that pile. Talk all the smack you want, but things like timelines, architectures and languages used are not public information at this point and we can be pretty sure these are not the most ethical people in the world.


I’m confident in the choices I made, thanks.


I swear I've seen your site before. I'd consider that good but hopefully it wasn't due to a similar scenario in the past. Anyway, best of luck!


Fortunately (depending on your perspective) this is the first and only time a company has not made good on their invoices.

I have great relations with every company that has paid me! And every company I’ve worked with has been satisfied with what I’ve built for them


That is fortunate! I'm glad to hear it's just a slight bump in the road. Best of luck going forward!


Sorry. That sucks. But why did you spend so long working without getting paid?


They had net 30 terms on the contract and I didn’t think anything of it. That meant I didn’t find out until six weeks after when they missed a payment and then shortly after that shut down the company.

Obviously I won’t agree to net 30 again.


Net 30 is just the way contractors are paid in the US. It's rare that a company can/will agree to something different, especially if there are multiple contractors bidding on the job.

Not saying it's impossible, just that it will cut down on your potential clients.




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