ConsenSys, one of the leading startups around Ethereum, announced a potential layoff yesterday, as noted by Coindesk. It’s worth noting that ConsenSys’ team is more than 1200 people at the time of writing.
Another Ethereum-based startup, Status, also announced 25% layoffs earlier this week.
And a couple of weeks before that, Steemit INC announced it let go 70% of the people it employed.
If you look at these numbers, you may be tempted to label it “recession”. But if you put it in perspective, things are a bit different. Three years ago, these companies didn’t exist. They didn’t grow up organically, they exploded, riding the wave of the 2017 crypto bull run. It was more enthusiasm pumped into the structure of these startups than it was real, verified market value.
It’s easy to get carried away when Bitcoin grows in a day more than the entire stock markets in one year, but seems not everybody is prepared to see the other side of the token. What goes up must come down. Especially if these companies hardly had any time to verify their business model, or to understand what problems they are actually solving, if any.
So a correction was due.
I think these layoffs are a sign of health and maturity. It’s useful to know how to scale down, just as well as how to scale up. It’s important to understand what is the point beyond you start losing money and stop before the bleeding gets lethal. Not everybody can do that, especially if the most important resource your company had was hopium.
We’re finally at that crossroad, where valuable projects, truly innovative startups and competitive teams are splitting from scams, naive crypto-preneurs or just incompetent folks. Whoever will survive, will thrive. And whoever is left behind should suck it up, breathe in and start something else.
Photo by Firdouss Ross on Unsplash