Seattle software startups cut staff, in possible sign of a cooling market

Qumulo and Chef, two of Seattle’s most heavily-funded software startups, laid off employees this week in a possible sign of a cooling market for tech companies.

A source tells GeekWire that 24 people were laid off from Qumulo on Tuesday, but the company declined to comment when asked for more details about the cuts or why they occurred.

Qumulo officially came out of stealth mode about a year ago after it announced a $40 million Series B round. The 3-year-old company, which has raised $67 million to date from firms like Kleiner Perkins Caufield & Byers and Highland Capital Partners, helps clients store, manage, and curate data.

Qumulo is led by CEO Peter Godman, who co-founded the startup with fellow Isilon Systems colleagues Aaron Passey and Neal Fachan. As of February, it employed 90 people. Update: Qumulo confirmed on April 18 that the company employed 160 people before the job cuts last week.

Barry Crist.
Barry Crist.

Chef, meanwhile, laid off a “small number” of employees, CEO Barry Crist confirmed with GeekWire today.

“A small number of employees’ job functions were eliminated as part of streamlining our operations to eliminate overlap of various customer facing engagement teams,” Crist said in an email. “To put it in perspective, this impacted two employees in the state of Washington. These sort of minor adjustments are part of running a dynamic, high performing business. As our product portfolio expands, we are shifting additional people to our product and UX teams. We’re growing and hiring rapidly and as I stated in a recent company-wide meeting I’ve never been more bullish about our business prospects.”

Crist sent a company-wide memo to employees this week (posted below and obtained independently by GeekWire) that explained the impetus behind “changes that both streamline Chef’s operations and also free up operating expense both for additional investment and to bolster our long-term cash reserves.”

A source tells GeekWire that seven employees were let go. In the memo, CEO Barry Crist noted that the Solution and Customer Engineering teams have been consolidated, while cuts were made to the Customer Account Management team.

Here’s Crist’s email in full:

First of all, I want to share some changes that both streamline Chef’s operations and also free up operating expense both for additional investment and to bolster our long-term cash reserves.

These changes mean that a few of our team members will no longer be with Chef. This is of course unfortunate, painful, and something we don’t take lightly. These are hard choices made in the best interest of our customers, community, and of course Chef.

Great organizations continually experiment, invest, evaluate, and rapidly make changes to adjust and improve. The changes we are making are in this spirit. These include combining our Solution and Customer Engineering teams, and scaling back our Customer Account Management team. In evaluating our business, we determined that we over-invested in the CAM function, which, while an important part of our engagement model, has not made the revenue impact through account expansion we had hypothesized. These changes resulted in a small staff reduction impacting members of the CAM, Customer Engineering, Solutions Engineering, and Training teams.

We have an opportunity to become one of the top companies in the software industry. For us to realize our full potential we have to, among other things, make difficult decisions and in particular land our bold product roadmap. In part, the expense freed through these changes will be shifted to achieve other top priorities such as product and user experience. We also want to continue to invest heavily in our customer-facing teams including our field sales organization.

Chef has raised $103 million to date, most recently reeling in a $40 million Series E round this past September. Leading investors in Chef include Draper Fisher Jurvetson (DFJ), Battery Ventures, and Ignition Partners. Founded in 2008, the company — formerly known as OpsCode — has several Fortune 50 customers like Facebook, Nordstrom, and Target using its products that help automate their DevOps workflow.

In September, Crist said that 2015 was a record year for Chef as far as revenue, customers, and partnerships — and noted that its growth rate was accelerating, too. The company also moved moved into a new 36,000 square-foot headquarters in Seattle in 2014. It employed 230 people as of September 2015.

The layoffs at both companies could be a sign of a more conservative tech industry in 2016, particularly with capital markets under pressure and VC activity slowing. Many venture capitalists and startup leaders have spoken of an impending bust — or at least cooling period — in recent months. At GeekWire Startup Day in February, VCs and angel investors shared tips for surviving a downturn, and nearly all of the panelists agreed that the venture financing climate is softening.

Madrona Venture Group, which invested in Qumulo’s Series A and B rounds, penned a letter to its investors earlier this year that advised startups to take conservative approach in 2016 amid an uncertain economic climate.

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Seattle home built out of spite hits the market


From the front, this Seattle home appears normal. But walk around to the side, and you’ll see a house that’s a sliver of its front-facing self — and is 55 inches wide at its narrowest point.

seattle marketing

seattle

seattle internet marketing

It wasn’t frugality or hipness that inspired its construction back in 1925, decades before tiny homes were a thing.

living room

It was spite.

seattle house

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Supreme Court rejects challenge to Seattle minimum wage law

The U.S. Supreme Court on Monday rejected a challenge by business groups to Seattle’s law raising its minimum wage to $15 an hour, a move echoed by other locales, in a case focusing on how the ordinance affected local franchises like McDonald’s.

The Seattle law’s supporters hailed the court’s action, which left intact a lower court ruling backing the measure, as a defeat for “the big business lobby” that has taken aim at minimum wage hikes.

The International Franchise Association and the businesses that challenged the measure did not target the actual wage hike. Instead, they argued that it was unfair for Seattle to exclude local franchises of big companies like McDonald’s (MCD.N) and Burger King (QSR.TO) from the small companies that the law gives three extra years to pay employees at least $15 per hour.

Seattle was the first major U.S. city to commit to such a high basic wage amid pressure from unions and workers’ rights groups. The move has since been followed to varying degrees by cities such as San Francisco and Los Angeles as well as by state lawmakers in California and New York.

Seattle’s law, which took effect in April 2015, requires businesses with more than 500 employees nationwide to raise their minimum wage to $15 by 2018. Smaller companies have until 2021 to do so.

The high court’s move means that cities and states that pass similar wage laws must treat franchises as offshoots of brand parents rather than independent small businesses.

The franchise association said its 2014 lawsuit sought “to level the playing field” for the 600 franchise businesses that employ 19,000 people in Seattle, and it was disappointed with the court’s action.

“Seattle’s ordinance is blatantly discriminatory and affirmatively harms hard-working franchise small business owners every day since it has gone into effect,” said the group’s president, Robert Cresanti.

A federal judge in Seattle in March 2015 sided with the city, and the San Francisco-based 9th U.S. Circuit Court of Appeals last year agreed.

Working Washington, a coalition of labor and nonprofit groups that spearheaded the campaign to pass Seattle’s wage law, called the Supreme Court’s move not to hear the case a victory for workers.

“The big business lobby has thrown everything they got at Seattle workers,” the group said, “but they keep on losing, and the economy continues to boom.”

Seattle officials and the Service Employees International Union, which backed the city in the case, said franchises are not typical small businesses because franchising offers inherent advantages such as access to loans, brand recognition and bulk purchasing. But the franchise association countered that those perks come at a cost, namely royalties, fees and rent.

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Protesters Bite Cops, Throw Molotov Cocktails in Seattle

What began as a peaceful demonstration in support of immigrant and workers’ rights in Seattle on Sunday morphed into a riot as hundreds of black-clad “anticapitalist” protesters stormed through the city’s downtown area, smashing windows and clashing with police.

Five police officers were injured in the May Day mayhem, including one who was hit with a Molotov cocktail, another who was bitten, and a third who sustained a cut on the head from a rock thrown by protesters. Authorities said nine people were arrested on charges of assault, property destruction, and obstruction.

Violent protests by anarchists have become an annual occurrence in Seattle on May Day, where several businesses, including Starbucks and Urban Outfitters, boarded up their windows on Sunday to avoid having them broken, according to the Seattle Times.

A Facebook page for the “May Day Anticapitalist March” said it has “become an annual event where we march in rage against capitalism and the oppressive forces that seek to gentrify our communities and force the poor into everlasting homelessness, or death.” The post warned attendees to “be prepared for violent police repression (pepper spray, flash bang grenades, tear gas, beatings, arrests, etc.).”

Related: Fatal Car Bombing in Southern Turkey Overshadows May Day Gatherings

After a peaceful pro-labor and pro-immigrant gathering that was permitted by the city early in the day, a group of so-called “black bloc” protesters began to gather in Westlake Park in the heart of downtown Seattle. Organizers urged members of the crowd to “wear black in solidarity with our comrades at the march and around the world.” The attire, which on Sunday included hoods and masks, can also make it difficult for police to spot individual protesters who are responsible for violence in a large crowd. Police posted on Twitter that they saw individuals carrying poles, large bolts, and rocks.

At around 6:30pm local time, the crowd began marching through downtown, flanked by a large contingent of bike cops in riot gear. Some in the crowd threw rocks, and police responded by showering them with pepper spray and launching “blast balls,” a weapon similar to a flash-bang grenade that emits bright light, deafening sound, and pepper spray.

Related: Murder in the Jungle: The Brutal Killings That Woke Seattle Up to Its Homeless Crisis

As the mob moved south, some protesters reportedly set off fireworks, smashed windows, and hurled Molotov cocktails. The group ended up at a Costco store near the baseball and football stadiums at the southern edge of downtown, where people, according to the Seattle Times, were spotted flipping over shipping pallets. Police made several arrests in this area.

Videos posted on YouTube and Twitter showed chaotic scenes as bike cops tackled protesters and used their cycles as makeshift barricades to herd the crowd. Footage showed protesters sprinting along the streets amid clouds of tear gas and ducking while blast balls detonated.

Of the nine people who were arrested, police said eight were men ranging in age from about 20 to 32, along with a teenage girl. None of the police officers were said to be seriously injured, and the one hit with a Molotov cocktail was not burned.

During a news conference on Sunday night, Seattle Mayor Ed Murray said police responded “appropriately” to the violence and showed restraint. Murray blamed the “senseless violence” on a “different crowd” from those who had attended the peaceful march earlier in the day.

Murray said it was “deeply regrettable that in a city that goes to incredible lengths to respect First Amendment rights, there are some who disregard our values and engage in senseless acts of violence and property destruction.”

Related: Seattle-Area Salmon Are Loaded With Anti-Depressants and Other Drugs Thanks to Human Waste

The unrest was a repeat of last year, when 16 people were arrested and three police officers injured. Protesters threw bottles and wrenches, and police responded with pepper spray and blast balls, just like this year.

Seattle Police Chief Kathleen O’Toole praised the department’s performance controlling the crowd on Sunday. “Our plan was much better this year than last year,” she said.

Reuters contributed to this report.

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AirAmerican Airlines craft Returns to Seattle Airport After Damaging Bird Strike

American Airlines Aircraft Returns to Airport After Bird Strike

A Dallas-bound American Airlines aircraft was struck by a bird Wednesday afternoon after taking off from Seattle-Tacoma International Airport, and at the pilot’s discretion, the Airbus 321 returned to the airport about 30 minutes after taking off.

In a statement, American Airlines said, “American Airlines 2310, from Seattle-Tacoma (SeaTac) to Dallas/Fort Worth (DFW), returned to SeaTac due to a bird strike, which struck the nose of the aircraft. The Airbus A321, with 150 passengers and six crew, landed safely and taxied to the gate.”

American Airlines

According to LiveATC.net, the pilot told air traffic controllers, “looks like we hit some birds after takeoff, we’re gonna need to go back and have the airplane looked at.”

The flight was scheduled to leave at 3:15 p.m., but departed at 3:36, according to FlightAware.com.

American Airlines added, “Our maintenance team is currently evaluating the aircraft. We apologize to our customers for the inconvenience, and are working to get them to Texas as soon as possible.”

Seattle-Tacoma International Airport also confirmed that the dent in the nose of the plane seen in the above photo was indeed caused by the bird strike.

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Brandon Browner rejoining Seattle Seahawks

Brandon Browner is reuniting with the “Legion of Boom.”

The free-agent cornerback will re-sign with the Seattle Seahawks on Monday on a one-year deal, NFL Media Insider Ian Rapoport reported, via a source involved in the deal.

Browner earned a Pro Bowl nod as a big-play machine in his first season with the Seahawks back in 2011. He was a key contributor, starting 36 games over three years for a historically great Seattle pass defense before signing with the Patriots in 2014.

Although Browner’s size and physicality come in handy versus bigger receivers and tight ends, he has lost a step the past two years, leading to a flurry of pass interference violations. He was released by the Saints in February after committing the most penalties in a single season since 2001.

Browner, 31, recently revealed that he played the entire 2015 season with a torn MCL suffered in the first preseason game.

“I never wanted to make an excuse, so I played thru it,” Browner wrote on Instagram. “… Last year was the most frustrating year for me, those who know me knew I was affected by it.”

Browner will have to bounce back in offseason practices and training camp to earn playing time after the Seahawks re-signed Jeremy Lane to go with All-Pro Richard Sherman and DeShawn Shead.

UPDATE: The Seahawks announced Monday they have signed Browner.

Brandon Browner rejoining Seattle Seahawks

Seattle Area Shows Restaurant Job Growth With Higher Minimum Wages

As the country has just seen another set of union-backed labor actions targeting fast food chains on top of Verizon workers striking, it seems like a good time to again reexamine the minimum wage discussion.

One point of debate has been whether Seattle’s minimum wage increase plans have hurt job growth. Some conservative pundits like Mark Perry at the American Enterprise Institute, continue to argue that the “new ‘restaurant math’ of Seattle’s $15 an hour minimum wage is starting to ‘break the system.’” He heavily quoted a piece by Grant Chen, who claimed that the minimum wage increase was driving his restaurant out of business.

That might be true. If minimum wages go up, then, generally, employers who pay minimum wage will either see profits go down, raise prices, or cut staff. Depending on the circumstances, that can play havoc with businesses, whether collectively or individually. Or, if the prevailing wages were already high, it might not matter. According to the Seattle Times, which spoke to a number of restaurateurs who were closing their businesses, said that the new minimum wage didn’t seem to be an issue for any of them.

So, let’s take another look at the restaurant employment numbers for the Seattle metropolitan statistical area, which also includes Tacoma, Bellevue, and a good number of other cities. The problem with looking at an MSA is that you don’t see just the city but a lot more. Unfortunately, a ready supply for industry-specific data by city is not easy to come by.

Perry looked at some other Seattle-specific data suggesting increased unemployment. That effectively changed the metrics in mid-argument because the numbers weren’t specifically about restaurant or low-wage jobs in general, and the question is what effect a higher minimum wage will have on job creation. In addition, the Bureau of Labor Statistics data he choose — not that he had a lot of alternate sources — depends on small samples and can be prone to error.

So let’s head back to the Seattle MSA data for the restaurant industry (from the Bureau of Labor Statistics by way of the Federal Reserve Bank of St. Louis) and also check the data for the entire state of Washington as a comparison. Here’s a five-year plot for the Seattle MSA to start:

Yes, there was a downturn between November and December 2015 and various ups and downs before. The total number of restaurant jobs in February 2016 for the area was 142,900. For February 2015, it was134,300. The year-over-year growth was 6.4 percent. Now let’s look at Washington State:

Restaurant employment for the state was 234,300 in February 2016 and 224,300 in February 2015, showing year-over-year growth of about 4.5 percent.

This is a high level view, of course, and doesn’t get to low-wage, or even restaurant, jobs for Seattle only. Maybe a lot of restaurants moved out of Seattle and into Bellevue or Tacoma. But, overall, the region has seen more growth in restaurant jobs than the state as a whole.

Trying to burrow deeply into data can make sense, but it can also create a false sense of insight and accuracy. One sector that higher minimum wages should affect is the restaurant industry. To the degree we can see now, if anything growth was better in and around a higher minimum wage (although the January 2016 installment might take some time to make its effects known) than generally in the state with a lower minimum wage.

But supporters of higher minimum wages should be wary before claiming victory. The MSA data is spread over too many places, so it’s impossible to say that the real picture is known and impossible to claim that higher minimum wages increase the number of jobs.

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New Seattle business caters to canines

SEATTLE (AP) — Stand on any block around lunchtime near Amazon.com’s downtown Seattle headquarters and there are two common sights: people walking their dogs and people buying lunch at food trucks.

The scene offers a window into Seattle’s infatuations with dogs (and cats), which outnumber children here, and the maturing roaming food truck market.

Now, one truck is combining both by catering to humankind’s best friend.

“It kind of seems natural that now that we’ve conquered the people food truck market that we bring that to our faithful furry friends,” Janelle Harding said.

Harding is a customer of The Seattle Barkery, a food truck that serves dogs and their owners in Seattle-area dog parks, office building parking lots, farmer’s markets and private events. It rolled into operation 10 months ago.

“I think there is definitely a market for more things like that . where human and canine activities are combined. You don’t want to always leave them at home or leave them in the car,” said Dawn Ford, who owns and operates the truck with her husband, Ben.

By Dawn Ford’s count, their truck is one of just a handful in the country that caters to canines. The concept is new and rare enough that dogless people occasional misunderstand and purchase a treat.

“They end up ordering something, and they seem weirded out by it,” Ford said.

Popular offerings include air-fried chicken feet and duck neck, cupcakes with bacon rebranded “pupcakes,” mini cheesy doughnuts, pumpkin pretzels and peanut butter-banana cookies.

“Peanut butter is like a must,” Harding said after buying treats for her pug, Stella.

Ford worked at one of Seattle’s dog-friendly bars, then became a dog walker and began cooking her own treats for customers following a rash of product recalls.

“All of our treats are soft,” she said. “All of our treats aren’t filled with ingredients you can’t pronounce.”

Giving dogs homemade treats rather than processed ones is deeply important to Ford.

“What we feed our animals reflects their health,” Ford said. “Animals’ lives are short. If we can feed them good quality products . why wouldn’t you?”

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Seattle’s homeless move into one of its buildings

Amazon has offered the use of one of its buildings in Seattle to help ease the city’s declared state of emergency on homelessness.

The tech giant bought in 2014 what was originally a hotel and had most recently been used as a college dorm. The now empty building is located on Amazon’s downtown Seattle campus.

Amazon is planning to tear down the building in 2017, but before demolition begins will work with Seattle non-profit Mary’s Place to use it as a shelter for 200 homeless people.

“Over the last few months we have worked with Mayor Ed Murray’s office and Mary’s Place … we saw a unique opportunity to help hundreds of homeless women, children and families,” Amazon said in a statement.

Seattle's homeless

People are scheduled to begin moving in on Monday.

However, the space is only temporary, and Amazon plans on turning the lot into office space in the spring of 2017.

This isn’t the first time Mary’s Place and Amazon have joined forces. Last month the nonprofit announced that Amazon customers had the option to order items off Mary’s Place’s wish list on the site.

“We distribute hundreds of diapers, bras, socks, and more every week. Your help filling our shelves will make a huge difference in the lives of moms, dads, and kids who are experiencing homelessness,” a statement from the company said.

http://money.cnn.com/2016/04/14/news/companies/amazon-shelter-for-homeless/index.html

Seattle’s New Minimum Wage Hasn’t Raised Retail Prices

More than a year after a new minimum wage took effect in Seattle—$12.50 an hour now for small employers, increasing to $15 an hour by January 2018—prices at most stores haven’t gone up.

In a new report, researchers from the University of Washington presented data that showed “little or no evidence” of price increases in most sectors. Before the minimum wage law took effect, most retailers said they would have to charge more—and most low-wage workers were worried that they would have to spend more for necessities. So far, that hasn’t happened.

The researchers also checked the prices of things like rent and gas, because they wanted to understand how the law might affect the biggest expenses for low-income families. Those didn’t change either—not a surprising finding, since apartments and gas stations don’t rely on much labor.

The steady prices in the retail sector were more unexpected. “We looked in grocery stores, drugstores, and other types of retail outlets—we were focusing once again on places where your middle class or low-income families would be more likely to shop,” says Jacob Vigdor, a public policy professor at the University of Washington. “The fact that we didn’t find very many price increases in those types of outlets was a little bit more surprising to us.”

In some cases, store owners told the researchers that they couldn’t raise prices because of competition. “In some cases, you’ve got brick and mortar stores that are competing with Amazon.com—Seattle being the headquarters of Amazon, we really have a very dense on-the-ground network of delivery of almost any commodity you can find in almost any retail outlet,” he says.

One exception to the trend was restaurants, which raised prices 7%-9% because they rely so heavily on labor. Even there, however, owners sometimes found other ways to cut expenses as they paid workers more, such as closing during slow hours or asking customers to wait a little longer because fewer people are waiting tables.

“The marketplace is going to shake out those adjustments over the long run, and we’ll see which ones are sustainable because the restaurant can do them and not drive away customers,” Vigdor says.

It’s possible that prices may eventually increase as well. The researchers are currently analyzing more data to see what other impacts the minimum wage increase might potentially have, from fewer jobs to fewer shifts at part time jobs.

Vigdor believes that some cities, Seattle included, can absorb the change more easily than others.

“Seattle’s a pretty affluent town,” he says. “San Francisco’s a pretty affluent town. New York City is an affluent town. In these sorts of places, you’re dealing with a lot of consumers who are already used to the idea that they’re going to pay a premium for their Fair Trade coffee, and they’re going to shop at the farmers market so that their dollars go directly to the person who grows the food … For that type of consumer, paying the workers fairly can actually be a selling point.”

In other areas, such as California’s Central Valley or upstate New York, he says the impacts of new minimum wage laws might be more strongly felt. New York and California both recently passed laws that will slowly ramp up minimum wages to $15 an hour. Others, such as researchers from the University of California’s Labor Center, have suggested that even in poorer areas, the increase in wages won’t dampen the economy—because low-wage workers will have more to spend.

In expensive cities like Seattle, it’s hard to argue that low-wage workers can survive without a higher minimum wage. In the University of Washington report, the researchers studied employees who couldn’t pay bills even with government assistance. On average, by the end of the month, their net bank balance was -$138.

“The basic message is that it’s impossible—families are not making ends meet, they have expenses that exceed their incomes,” says Vigdor. “The minimum wage is a band-aid for them, but truth be told, they need more than that. If you’re going to live in a community that’s expensive, then this kind of ends up being part of the bargain. You’re going to have to expect that in order to have people to serve you your meals or serve you in retail outlets or do anything for you—the labor costs are going to be there.”

http://www.fastcoexist.com/3059118/after-a-year-seattles-new-minimum-wage-hasnt-raised-retail-prices