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Today in a blog post as well as on twitter, Erik Voorhees announced that his company, ShapeShift.io, had to let go of 37 employees, citing among other things the toll that 2018's bear market had on the company.
With a heavy heart, today we laid off 37 people. We've published a blog on this, also discussing some of our missteps and lessons as a company. "Overcoming ShapeShift’s Crypto Winter and the Path Ahead" by @ShapeShift_io https://t.co/1eNT54eyPp #bitcoin
— Erik Voorhees (@ErikVoorhees) January 8, 2019
In the Medium post, Voorhees lays out four major areas that affected the company during the struggling market of 2018. First he says there were structural issues. Namely, the company grew faster than they could manage:
"By the time we learned how to manage a 10-person team, we were 30. By the time we learned how to manage 30, we were 80. Then 100. Then 125."
Next, due to their quickly gorwing size, the company began to experience legal issues. Any company dealing with crypto is plausibly going to fall under the watchful eye of financial regulation. Even if crypto isn't yet regulated, any profits in fiat certainly would be.
Third came customer issues. This is primarily connected to the fact that many users looked elsewhere after ShapeShift began implementing a membership program, complete with strict Know-Your-Customer (KYC) compliance. As the site had previously been completely anonymous, this turned off quite a few.
Lastly and most obvious, the financial issues that come with a year long bear market. Like most people in crypto, they lost money all year long.
Twitter of course came out of the woodwork to respond to this announcement. Some were compassionate about it, some optimistic, with still others chiding them for mistakes:
Sorry to hear it. My thoughts are with you and the ShapeShift (current and former) team. 😢
— Ken Hodler (@bgok) January 8, 2019
That is really unfortunate. Keep doing the great work.
— Marco Peereboom (@marco_peereboom) January 8, 2019
For many of the laid off, this will be the catalyst to begin their own ventures and start ups. Challenging times reward us the greatest.
— MyCryptoDad (@MyCryptoDad) January 8, 2019
Everything will grow stronger after the death of the Bear pic.twitter.com/7u0VHU0WxS
— Litecoin Moses {No XRP} (@l3l2ucelee) January 8, 2019
It's the KYC policy that put the dagger in shapeshift, not crypto winter
— Judd [⚡] (@Judd515) January 8, 2019
May have been something to do with membership and hindering traffic/business through ShapeShift.
— Btcgm822 (@btcgm822) January 8, 2019
This looks to be another unfortunate casualty of a long bear market. With any luck the coming year will be more favorable and many companies, including ShapeShift, will see a brighter future as the months go on.
Read more: Bitmain issuing massive layoffs, including BCH GO client development team, ConsenSys cuts were "ruthless and swift", according to staff