- Airplane raised a $32mm series B in September of 2022 [crunchbase]
- Tech company valuations fell off a cliff over the course of 2021-2023 [memory]
- By 2023, with slowing growth, it's likely that Airtable was no longer able to raise additional funding. Best case was likely a down-round.
- The investors probably exerted significant pressure, particularly given the departure of the other founder and several key employees, to wind down the venture.
- An acquihire is a reasonable way to end the company, return money to investors, and give employees some sort of payout and a high likelihood of remaining employed.
Just my opinion, but if I were the author I would consider that maybe the remaining founder actually did a decent job of looking out for their team. Signing bonuses of $50-75k is not life changing money, but a job and a signing bonus is a hell of a lot better than nothing.
It’s important to understand who is actually in charge before assigning blame to anyone.
But also,
> It could also be considered poor form for a founder to make this public if that’s what happened.
I mean, they asked the CEO what was going on and he didn't seem to give good explanations. Especially if it wasn't his decision.
The author stated they had millions if not 10s of millions in the bank and a bit of runway. And they had already done layoffs. Based on this, they were not under pressure to raise or do a down-round.
Separately and related to a sibling comment, the fact that Thrive Capital invested in Airplane and Airtable means they can now have a positive "tombstone" for Airplane by saying it was an "exit" while receiving a bunch of their original investment back.
Do the investors care? If they're not making 100x return on an investment, will they truly care about 0.5x return? My feeling is that most would just say "OK, you have a good team, you have money in the bank, pivot and go wild".
Depending on timing (and here it was just over a year between the round closing and the acquisition), you may be able to easily re-deploy the capital you get back as another investment included in the same fund, and get another shot at a 100x return.
I'd be curious to hear what others think (particularly actual VCs, not just pretend ones like me) but this seems like a very rational outcome to me.
There's no chance the investors were happy with this- if a company had years of runway they almost certainly advised them to tough it out. Even a downround would be preferable compared to a total writeoff
so many companies raised on sky high evaluations in the '21-'22 vintage, that its going to be a tough ask to keep going now the market has reset and valuations returned to the mean.
I love what I'm doing and I feel very fortunate for the opportunity to build a startup in a domain that I cherish, devtools, and have grown to love demanding customers as people that care about our product. But if I wasn't passionate in it and its technical challenges, I think there are easier opportunities out there to make a successful startup and can easily imagine how disappointing this segment is with the track records they had as founders.
For my shop this was not really a big deal - we did not leverage Airplane's apps or workflows, we just used it to productionize some scripts that support edge cases in our platform and the migration for that is not too bad. Of course, I didn't feel that way when I got the email on Jan 3rd.
Will likely end up releasing MVP OSS this month and have to go back to work while continuing to bootstrap. Would love to chat sometime; may be some ideas in here you'd find interesting.
Both of those companies have raised >$100M. After that success, the prospect of continuing to run a middling company in the shadow of Retool isn't very appealing.
Company burned more money than it made and winded down, impact on customers have been ultimately negative.
Where's the success?
As far as I can tell that applies to neither Heap nor Benchling which were the companies OP cites as successes.
The subsequent execution might or might be another success.
It's a proxy for size of company, and often one of the two public ones (the other being the number of employees you can count on LinkedIn). It's not perfect, of course; there's always a Zapier which raises 1.3M and then grows sustainably. But for VC funded companies, this lets you compare them, if not perfectly.
I think everyone would agree that revenue, ARR, and profitability are all more important. But those metrics are rarely shared for private companies.
I’m not asking this sarcastically. Trying to understand how this works because I’ve always taken “co-founder” to mean “I was one of the people that started this company from day 1”
It's reasonable that someone joining <1 year in would be considered a co-founder if they had founder-level commitment.
Obviously not familiar with the particulars, but people don't always say why they are moving on. There is not much of an upside to revealing any negative issues, so it's usually presented as "really wanted to stay, but just found a new exciting opportunity". If all of the sudden 4 people in a few month period "really liked the position, but just found new and exciting opportunities", something else is going on.
It's an apt metaphor.
And yet no one is going to give you a substantial salary rise unless you sign a resignation letter.
All that questions about the reason why someone wants to leave during recruitment or exit interview are a ceremonial, and people are answering with polite bullshit.
Yes, I'm looking for a new job to get more experience, to grow, to get new challenges. Not because I want more money and we all know it is the easiest way to get it. Not because I have an idiot manager. Etc..
That said, the after-the-fact communication feels lacking. It sounds like your CEO could have at least explained things in more detail after the fact (ie. Why he felt a pivot would be necessary to get to where the business needed to go.)
Such is life, I guess. I'm wishing you and the team the best for the future!
When we heard Airplane was shutting down, everyone's first thought was "can we hire that Yolken guy?"
Open source may be safer than proprietary software in that regard, but it's still not a guarantee. Still far preferable IMO.
No, but you can maintain it yourself, or hire people to, or worst case you can at least run it and accept the bugs. You're not going to just get in one morning and find out they've turned off the servers and all the stuff you had in their system is gone.
Why would Airtable go through all this trouble just to get a product owner for something unrelated?
Did Airtable even pay anything for Airplane.dev or was this just a face-saving maneuver? I don't understand how the Airtable board would sign-off on this if they are just tossing the tech AND all the users. Outside of those assets, acquihires happen with the aquirer wants the same tech built into their offerings. They are hiring a proven team with existing domain knowledge to reduce the risk of adding this tech. But none of that is happening.
Why not find a way to do right by their customers if Airtable truly isn't interested in the product? Open source it, or find a company willing to take the product and customers on?
It still makes sense for Airtable, as they do get someone with a proven track record of building tech products in general to build out an important division of their company. You say that it's for something "unrelated", but integrating AI capabilities (Airtable isn't looking to build new foundational models I assume), should definitely be in their ballpark. Though of course that's a gamble with a very low bus factor.
So it's a win-win-win for Airtable, the CEO/CTO and the investors. Airtable gets a capable leadership person to de-risk their AI endeavours (where IIRC they were lagging a bit behind competition like Notion). The CEO gets to work in a less stressful position, and maybe something that's a more interesting topic to him. The shared investor is happy as it strengthens their already strong unicorn company at the expense of a company that probably wouldn't be able to grow to notable size for them. Many of the other investors that are individuals I'd wager were happy that their money isn't tied up in Airplane anymore and that they can place new bets in a hot AI market (just a guess based on who is on that list).
> Why not find a way to do right by their customers if Airtable truly isn't interested in the product? Open source it
Presumably because the cost of that is significant for little to no gain for them, especially if you factor in the opportunity cost.
> or find a company willing to take the product and customers on?
I think the buyers that make most sense there would be e.g. Retool, which are too close of competitors to Airtable that they want to directly sell marketshare to them. It's probably better for Airtable to let the customers spread across all their competitors.
You don't.
I've walked into every startup with big promises of stock compensation highly cynical about seeing any of that equity, ever.
Unless the cash is sitting in your account, it doesn't exist.
But so long as you sell for less than your total raise, common shares will be worth nothing even with liquidation preferences of 1x.
> How can a regular employee joining a startup know beforehand that there isn't a high chance of their equity (which is probably a significant part of their total comp) being worthless even if a big acquisition is made?
Ask to see the cap table to understand what the company would have to be sold for in order for your shares to be worth anything.
sadly, founders who are hiring don't want to hear that and typically don't want to compensate fairly for the high probability that their precious offering of equity is worth zero
For those people, there's a blend of two things: 1) you think you know something the market doesn't -- it may be something cultural, the product-market fit, maybe you're just really impressed with the people and the momentum you're seeing, maybe you have really deep expertise and insight from previous experiences with the industry 2) you just plain enjoy it more, so the high risk premium is worth it to you overall over a more boring job where with a lower ceiling on rewards and career growth but higher risk-adjusted earnings
Working at a startup is often a mixed bag: an unpredictable, fast-paced, exciting journey full of variety and autonomy, with great highs and often even greater lows.
Most people are neither looking for that nor prepared for that day to day. Others believe they are open to it, but out of a desire to find the positive parts while avoiding the negatives, are fundamentally incompatible with doing what would drive success. I've never seen these kinds of folks achieve much consistently at startups.
It's the people who lean into rather than away from the risk that are instead the ones I've seen most success. They survive the notoriously high attrition and harsh pressure to deliver in high-risk situations without playbooks. They both can scale the company and hang onto leadership roles at scale. This, again, should not be and definitionally is not most employees.
The only way to be sure it's worth something is if a secondary market exists for the shares. This is only going to be true for later stage companies, not early stage ones though.
I think the best advice on the topic of early stage options is this blog post: https://www.benkuhn.net/optopt/
The TL;DR for me is: Be more picky about the company than the specific comp package. When you're there, find as much as you can about the revenue growth and retention metrics (assuming B2B), and quit after your cliff if it doesn't look like it is going well enough to justify the valuation.
Where was the board? Why not hire in a new CEO from the outside?
I appreciate that the author can't actually get inside the founders' heads, but something still smells fishy here.
The fact that both founders with the company were done with it points to the business not going well/not being in a position to go well.
Clearly all the investor interests were very important in making this deal happen, but the root of it is that the individuals with the most investment, knowledge and leverage decided they did not want to pursue the opportunity any more, and the best deal they could scrounge together was an acqui-hire.
If the company had been cash flow positive, or on a path to that soon enough, they probably would have found a new CEO, but if they're just burning down investor cash, it makes sense to wind it down if nobody with power believes in it any more.
In that situation, they'd probably just want their money back.
Airtable and Airplane shared a lead investor. After the CEO of ’plane left, the remaining team soon got rolled into ’table and investors got tens of millions back.
That's a layoff, right?
In our case, they genuinely wanted the whole engineering team, so the interviews were pretty friendly, and our offers were fair. I'm not sure that was the case here, and I'm sure that came through in the tone of the conversation.
Airtable acquires Airplane - https://news.ycombinator.com/item?id=38861271 - Jan 2024 (158 comments)
I was also surprised at how poorly the shutdown was communicated, a single email went out and there was never any followup. I wouldn't be surprised if there was a reasonable percentage of their customers that were shocked on March 1st to find out they could no longer login to the product.
We were quite disappointed and surprised by the sudden choice to shut the company down. In many ways, we had good metrics, customers that liked us, a lot of runway, and a great team.
In the end, the decision came to our CEO. While he never gave a clear reason why, it was pretty clear that he burned out and tossed in the towel.
https://www.airplane.dev/blog/no-code-has-no-future-in-a-wor...
I do find commentary on the level of "interest" and behavior of various individuals interesting when it never mentions the actual fundamentals of the business (making any money?).
Why not just cut staffing to a minimal number of people -- go back to existing customers, and renegotiate existing contracts down (due to reduced support), and try to balance out the revenue with costs to get back to some level of profitability.
2-3 person indie hackers that bring in 400k in revenue are considered wildly successful. I have to imagine airplane.dev was bringing in enough revenue to support a team of 10 - 15 people who could forever be a thorn in the side of companies like retool. Maybe there could even be an exit one day for the people staying behind.
Even the founders could leave, just hand it off to a group of employees who are still interested in working on the problem, will have more control over the company, get better work life balance, etc. Rather than just scrapping it all
I'm sure it isn't this easy, since that seems to never actually happen, but can anyone illuminate me on why?
However, it's still sad that in the end, the customers suffered the most. While I agree that the founder probably did fairly well in his situation, it's unfortunate that he did not consider or did not manage to achieve other options, such as buying out the company from investors. They had a decent product that could have become a successful and profitable business within its niche.
Any guidance will be appreciated.
Clace also works great for running simple web apps locally. Building and deploying a web app should be as easy and common for backend engineers as creating a CLI app is.
"Everyone has to re-interview for their job" is a terrible thing to do to people, IMHO.
You could instead have deal clauses about retaining the employees for some period, and how the leveling and compensation maps. If the acquiring company isn't willing to do that, then I think that tells you that you're selling out the employees to a worse environment.
Re-interviewing is one reason I wouldn't sell to Google, at least not without checking with the employees first. "So, uh, if we were to get acquired, how would people feel about having to do especially jerky re-interviews for their jobs, if, uh, it paid really well?"
"I already have it."
If there actually was an acquisition brewing at that time, and it's true that the CEO denied to employees that there was, that's one way to spoil any existing culture of honesty and goodwill.
If already under such an agreement, find a way not to lie.
Being proactive can help. The first example that comes to mind was when a highly-placed colleague (who I trusted, and with whom I had a good rapport) asked me directly whether I knew whether of anyone in the department who was job-hunting. I didn't know of any, but I told them I generally couldn't answer that question, as a matter of policy. Because that's the kind of question for which we can anticipate a hard conflict someday, between betraying a trust, and lying to someone else. And that's an easy conflict to avoid.
"If I knew, I probably couldn't tell you." is a useful phrase.
Regarding that service orchestrator, even before seeing Airplane et al, I've wanted to take my Terraform + Nomad + Temporal + Ops experience (coupled with all the other diverse HPC + UX stuff on my GitHub) and make a nice OSS PaaS out of it.
But I didn't because Nomad is "Business Source Licensed" -- so once I put all that work in and try to make it customer-supported, HashiCorp could shut down any commercial hopes once they finally decide to put Nomad on HCP (why not yet OMG?!). But I get why it's licensed like that, no shade on HashiCorp, any of the big clouds could otherwise host Nomad and crush them.
I much prefer Nomad to K8S for what I do (HPC on-prem + cloud-edge). And HCP itself runs on Temporal!
Would effectively be a risky, but free bet on a growing company.
Not to play the blame game but sounds like it comes down to cofounders just losing interest in their own company. Rest was just a side effect.
Unfortunately this is becoming more and more common. The cult of the irrational, warrior founder/CEO who takes the startup journey as literal life or death is even rarer.
What is even more weird to me is that I know founders who sleep 2-3 days in the office trying to make their startup work and grow, year after year.
They are hiring for people like you. They always get rejected for some reason.
Yet Silicon Valley natives get their way easily with great engineers like the ones in your team. I don't mean to offend anything, I have been just really curious what makes great people like your team go with founders who give up eventually. Cos I used to think you can sort of sense a founder who is not in it for life and death.
Building things on an early-stage no-code platform like this without at least an open source escape hatch feels like a huge risk to me.
Sucks to be a customer on the other side of this now.
Of course, the benefits of taking on this risk may often be worth it. Smart bets don't always pay out.
It was still a big pain, but it would have been a whole lot worse without that escape hatch.
