People reading a lot into this, the bottom line takeaway is:
They just let go 22% of people who weren’t getting the job done. So that they could retain the people who are and pay them more.
And if they were generous with those 22% then that seems fine. I’m not a fan of layoffs, but in a for-profit company that wants to retain its best people it sounds necessary to meet the moment.
Today we reduced headcount by 22%. The business is the strongest it's ever been. So I think it's important to be direct about what I'm seeing and why.
First, I made this decision and I own it. I did it because the way to operate at the highest level of productivity is changing, and to win the future, ClickUp needs to change with it.
Second, this wasn't about cutting costs. Most savings from this change will flow directly back into the people who stay. We'll be introducing million-dollar salary bands. If you create outsized impact using AI, you'll be paid outside of traditional bands.
Most importantly, I have the deepest gratitude for those affected. We're doing this from a position of strength specifically so we can take care of people properly. Everyone affected receives a package aimed at honoring their contributions and easing the transition.
I only see two options: wait for this to play out gradually in the market or be honest about what I'm seeing and act proactively.
THE 100X ORGANIZATION
The primary change is that we're restructuring around what I call 100x org. The goal is 100x output. The roles required to build at the highest level are fundamentally different than they were a year ago.
Incremental improvements to existing systems won't get us there. We need new ones. That means creating enough disruption to rebuild rather than iterate on what's already broken.
The common narrative is that AI makes everyone more productive. It doesn't. Many of the workflows of today, if left unchanged, create bottlenecks in AI systems.
These roles will evolve. But waiting for that to happen naturally means falling behind now.
The 100x org is actually heavily dependent on people - infinitely more than today. This is only possible with 10x people that have embraced and adopted new ways of working.
THE BUILDERS, AGENT MANAGERS, AND FRONT-LINERS
— THE BUILDERS: 10X ENGINEERS
I don't think most companies have internalized what's actually happening with AI in engineering. The common narrative is that AI makes all engineers more productive. That may be true in isolation, but at an organization level - that is the farthest thing from reality.
Here's what we've validated recently at ClickUp: the great engineers, the ones who can orchestrate, architect, and review, are becoming 100x engineers. They're not writing code. They're directing agents that write code. The skill is judgment.
AI makes the best engineers wildly more productive, and everyone else using AI slows these engineers down.
Think about it - the bottlenecks are (1) orchestration - telling AI what to do, and (2) reviewing - what AI did. Everything is leapfrogged and no longer needed.
So who do you want orchestrating and reviewing code?
And how do you want your best engineers to spend their time?
If your best engineers are spending time reviewing other people's code, then this is inherently an inefficient bottleneck. These engineers can review their agent's code much faster than reviewing human code.
The new world is about enabling your 10x engineers to become 100x.
The wrong strategy is to push every engineer to use infinite tokens. Companies doing this are celebrating 500% more pull requests. But customer outcomes don't match the volume of code being generated.
I call this the great reckoning of AI coding, and every company will face this soon if not already.
More code is just another bottleneck to the best engineers, and ultimately to your company's impact as well.
— THE BUILDERS: 10X PRODUCT MANAGERS
Product management and design roles are merging.
Designers that have customer focus, become more like product managers.
And product managers that have intuition for UX become more like designers.
The bottleneck of user research is gone. It takes us just one mention of an agent to kickoff research and analyze results.
The bottleneck of product <> design iteration is also gone. The product builder iterates on their own, along with agents and skills that ensure alignment with quality and strategy.
Also controversial today - I believe that the wrong strategy is to have your PMs shipping code - that just introduces another bottleneck that the best engineers will waste their time on.
To be clear, PMs should be coding but they should do this in a playground to iterate, validate, and scope. That code should not go to production.
Everything outside of managing systems, orchestrating AI, and reviewing output becomes a bottleneck.
That's why the other roles that are critical along with these are the systems managers (to reduce bottlenecks) along with a bottleneck you can't replace - customer meeting time.
— THE SYSTEM MANAGERS
Ironically, the people that automate their jobs with AI will always have a job. They become owners of the AI systems - agent managers. We have many examples of these people at ClickUp.
The underlying systems in which we operate are absolutely critical to get right. I think most companies are delusional to think they can iterate on existing systems and compete in this new world.
You must create enough disruption so that old systems are deprecated entirely. If there's any definition for 'AI native' that's what it is.
— THE FRONT-LINERS
In a world that will become saturated with AI communication, the human touch will matter more than anything to customers.
This is a bottleneck that you shouldn't replace - even when agents are high enough quality to do video meetings.
One-on-one meeting time with customers is something that shouldn't be automated. The systems around the meetings should be - so that front-liners spend nearly 100% of their time with customers.
REWARDING 100X IMPACT
In a world where companies are able to do so much more with less, where does that excess money go?
In our case, much of the savings in this new operating model will flow directly back to those that enabled it.
We must reward people that create productivity accordingly. This aligns incentives on both sides. Plus, in a world where your best people create 100x impact, you can't afford to lose them.
You should aim to retain these employees for decades. The context they have and their ability to efficiently orchestrate and review will be nearly impossible to replace.
Compensation bands of today should be thrown out the door. We're introducing $1 million cash/year salary bands with a path available to nearly everyone in the company if they produce 100x impact by creating or managing AI systems.
THE FUTURE
Nearly every company will make changes like these. The ones that do it proactively will define what comes next.
The future is not fewer people. It's different work, new roles, and better rewards for those who embrace it. We're already seeing entirely new roles emerge, like Agent Managers, that didn't exist a year ago.
ClickUp is positioning to lead this shift, not just internally, but for our customers too. I've never been more certain about where we're headed.
7 takeaways from Nate Quigley; founder of @chatbooks and father of 7:
1. Your spouse might be your best co-founder, even if they don't want the job. Nate's wife Vanessa had zero intention of joining his startup. But after watching him build something for two and a half years that no one used, she walked downstairs and asked him what he was doing with his life, told him to "just print my Instagram" and singlehandedly saved the company.
2. The best startup ideas come from watching your kids cry. @VanessaQuigley found their youngest son sobbing over a handful of school photos, saying "mama, I don't want to grow up." He had five printed photos to his name. That moment gave Chatbooks its emotional core and its product direction all at once.
3/ When you're doing your best parenting, you're birdwatching. Nate itold me his best moments as a dad come when he treats his kids like a rare species he's observing with curiosity. "Isn't that interesting? That's how they're doing that. Huh." instead of "Why aren't you soaring in the direction I think you should go?"
4/ The Merganser duck is the perfect metaphor for letting go. Baby mergansers ride on mom's back, then slowly fall off, swim behind her, and eventually head out on their own. Nate says he still hasn't figured out how to be the dad merganser who watches them swim away and thinks "great, they're off doing their thing."
5/ Family rituals can't protect your kids from everything, but they build a foundation. The Quigley family had Monday night traditions with songs, a family creed, talent corner, and more. Nate used to imagine it as a wall keeping scary things out. It didn't always work that way. But he hopes those rituals are programmed deep enough that his kids remember they're part of something.
6/*Don't quit and don't run out of money works for startups and for parenting. Nate's boiled-down advice for founders is "you must be present to win." Same applies to raising kids. Watching them get hurt (especially by their own choices) is brutal, but the job is to stay on the field.
7/ Fighting big tech for your kid's attention is a rebel alliance situation. Nate has tried Bark, Brick, Analog, and a "plug your phone into the hallway at night" rule. His youngest refused all of it. Then one day Nate walked past and saw the phone plugged into the hallway on its own. Lessons can land on their own schedule when you least expect it.
Find our conversation by searching Startup Dad on Youtube and wherever you listen to your podcasts.
I talked to Nate Quigley on Startup Dad and he told me how his wife @VanessaQuigley had to stage an intervention to get him to pivot his company (then joined as co-founder!).
Feels like the world imploded yesterday when Railway went down for a few hours. A couple thoughts on this:
First, what happened - apparently they got temporarily blocked by Google Cloud (GCP) which kneecapped their entire service. Whoops. Why did they get blocked? Who could say. Maybe they'll tell us at some point but my guess is it was accidental.
1. I don't think I'll be rushing away from Railway for all of my PaaS projects. A few reasons - I'll bet they don't make the same mistake twice. I can imagine that they will be building in redundancy so they never have GCP as a single point of failure now. I also think that they've built a really great product: it works well, is intuitive after a little tinkering, and is affordable. Yesterday's incident aside... they've been incredibly reliable.
2. Yes there are other options and I'll probably start tinkering with them for new projects. But migrating all my stuff that I have humming on Railway is annoying and I don't want to do it. I'd rather just keep building.
3. Other people will make different choices; especially if their revenue or business depended on it. They'll need to create their own PaaS redundancy. Just like Railway needs multiple cloud providers for their infrastructure.
4. Shouting about a startup getting punched in the nose and learning a valuable lesson is useless and people need to chill out. I don't *think* we're dealing with life or death situations with our Railway services (maybe? but probably not). Also, AWS goes down. That's worth shouting about bc the company is worth multiple trillions of dollars. Railway? Not so much.
5. Made me somewhat concerned for when the robots take over and do all of our work for us... then the server goes down. How will we eat? Who will clean? What about those Waymos? It was eye opening to think about how much our daily infrastructure will depend on a handful of companies in the future. People are starting to experience this now when Claude goes down: HoW dO I Do ThE CoDiNg AnYmOrE?!?!?
Anyway, that's my take. And I'm happily back to using Railway today.
Be Cloudflare:
- Fire 1,100 people because AI is here
- Stroll into the 2pm earnings call
- Beat almost every analyst expectation
- Also you just fired 1,100 people so COST SAVINGS!
- Stock drops 15%
🤷♂️
@allenwalton@clairevo I’m not sure it does come down to that. Typically when you refer to a company as “huge” it doesn’t imply that they’re a small business.
Rex Gelb's manager told him "the sooner you give up, the better" right before he became a dad. Terrible advice on the surface. But after talking with Rex on Startup Dad, I think it might be the most honest parenting advice I've heard.
Rex spent 10+ years at HubSpot. His wife was at Dropbox. After parental leave, they both quit within 24 hours. They role-played their quitting conversations with each other the night before.