From this morning’s daily newsletter. Subscribe above.
The ConsenSys layoffs announced earlier this week seem like short-term bad, long-term healthy news for the company and for the ETH ecosystem.
I continue to think the ETH venture production studio / infrastructure development / enterprise blockchain company is among the most misunderstood in crypto, and I’ve got some intel regarding the restructuring and coming fundraise.
1) Will the slow bleed cripple ConsenSys?
Remarkably, maybe not.
Ben Horowitz tells an anecdote in his new book (I recommend) about how his previous company, Opsware, survived multiple series of layoffs and still managed a billion dollar exit. To put it mildly, that’s a rarity. It’s tough to recover culturally – and financially – when your best people think the company is losing momentum and bleeding out. The A players tend to leave, and you get stuck in the ugly no man’s land of managing B talent, which eventually turns you into an also-ran.
This is ConsenSys’s second high-profile layoff, and I’ve heard a consistent murmur from most everyone I’ve spoken with from the company – current and former. That is, the company is messily structured, but there have been methodical efforts to streamline operations since the initial layoffs were announced in the bear market nadir in late 2018.
I’m inclined to believe ConsenSys could be one of those rare Opsware exceptions, and come out the other side of this much healthier. Two reasons. First, ConsenSys has always been a “mesh” of not-so-related experimental projects, so its public conversion to an infrastructure and tools company (and its spin out of the venture bets business), is healthy. The writing has also been on the wall for the past 18 months, so few internally should be surprised by this.