- The firm is now facing a crisis of morale, according to multiple former employees, all of whom left recently, just as it looks to raise fresh funds.
- In the wake of the controversial layoff of five employees, it came to light that some workers have been agitating for better working conditions, going so far as to sign an open letter to management. Five people — including employees involved in unionization efforts — filed complaints with the National Labor Relations Board. NPM has settled with three of them.
- We spoke with several former NPM employees, who say that under the year-long tenure of CEO Bryan Bogensberger, the company’s once-prized culture has eroded into an "atmosphere of fear," with its motto of "compassion is our strategy" giving way to a "pivot to greed."
- NPM executives said that their goal is to break the company’s reliance on venture capital to operate and build a sustainable business.
- Click here for more BI Prime stories.
If you’re reading this article, there’s a solid chance you’re enjoying the benefits of NPM without even knowing it.
But as happens so often in Silicon Valley, the usefulness and popularity of NPM’s free service hasn’t directly translated into blockbuster business success.
The Oakland-based startup recently launched NPM Enterprise, a paid tool for businesses. But it’s still largely reliant on the some $19 million in funding it’s raised from firms including Bessemer Venture Partners and True Ventures to keep the lights on for its 50 or so employees.
About a year ago, NPM hired a new CEO, Bryan Bogensberger, an industry veteran who as CEO helped sell Inktank, an open-source software business, to Red Hat for $175 million. While Bogensberger started in July 2018, his arrival wasn’t officially announced until January of this year.
"Bringing Bryan on as CEO and the changes to the leadership of the company over the last year or so have really been reflective of transitioning the company away from a mode of reliance on venture capital and getting to where we are to be self-sustained," NPM cofounder and previous CEO Issac Schlueter told Business Insider.
Under Bogensberger’s short tenure, NPM has found itself in the spotlight. It was criticized for its handling of the sudden layoff of five employees, representing about 10% of its staff, and then faced accusations from some of the laid-off employees that they were let go in retaliation for trying to unionize. Other employees signed a letter demanding better working conditions. And it has seen a string of high-profile resignations, including cofounder Laurie Voss.
In June, Bogensberger sent a message to employees saying NPM obtained funding from its board, allowing it to raise venture capital "without the threat of running out of money and with the full support of the board."
We spoke to 11 former NPM employees, all of whom left the company recently, and who tell us that behind the scenes, the company is facing a crisis of morale even as it goes through this critical phase of fundraising.
NPM once prided itself on its motto of "compassion is our strategy," and joked that its name stood for "Nice People Matter," the employees said. Now, the company is accused of creating an "atmosphere of fear" for employees, amid a larger "pivot to greed." The former employees say that management ignored their concerns, even as they were increasingly expected to work longer hours and navigate huge changes to their culture.
Employees have also called for more transparency at the company. In the same open letter in which employees called for better working conditions, they lambasted management for not being more open about NPM’s financial health.
"The company won’t trade ad hominem insults
At the heart of the culture clash at NPM may be a challenge that’s as old as Silicon Valley itself. NPM was founded by technologists who wanted to build something that could change the world, but eventually ran into cold, hard business reality.
On one hand, these former employees worry that the new management is jettisoning everything that made them want to work there. On the other, the company’s leadership has said that the NPM of old wasn’t a sustainable business. If you can’t generate revenue, your startup won’t survive.
Bogensberger said in a statement:
"An open source project needs more than passion to thrive. The sustainability of a free service like the npm registry requires people and infrastructure, and both are expensive. We define sustainability as the ability to build a viable business through proactive, value-adding community engagement, the development of mutually beneficial partnerships and the sale of commercial products that meet the needs of developers at startups and large corporations alike."
You can read Bogensberger’s full statement below the story. Business Insider also spoke with Schlueter and his co-founder Laurie Voss, who recently departed the company.
The new boss
NPM started its life as a collection of open-source software evangelists and idealists, working from the company’s headquarters in downtown Oakland — right in the center of the city’s growing tech scene, and with a view of Lake Merritt.
However, that changed in July 2018, when Schlueter, the cofounder, stepped aside as CEO to make way for Bogensberger, with the goal of helping the company figure out how to grow a business on top of its open source foundations. Bogensberger then stocked the leadership team with people he had worked with at Inktank: Ross Turk became senior VP of marketing & community, though he has since left, while Nigel Thomas became VP of sales and Danielle Womboldt became director of field marketing.
Former employees told Business Insider it was clear from the get go that Bogensberger was out of sync with much of the workforce. To several NPM employees, he was representative of the traditional Silicon Valley culture they had pushed against.
Employees say that in its earliest days, NPM’s motto of "compassion is our strategy" was taken very seriously, and the company had tried to make its culture more inclusive and thoughtful than at Silicon Valley tech giants like Facebook or Google.
But former employees say that they didn’t enjoy working with Bogensberger, who they describe as "hot-headed," "anger-driven," "impulsive," and "a bully."
Five former employees said that Bogensberger is known for yelling during meetings, and two people said Bogensberger was known to "test" employees, meaning that they were given additional responsibilities with "unrealistic expectations," and told by management that their job depends on meeting those expectations. The latter concern was echoed in a letter sent to a manager several months into Bogensberger’s tenure as CEO. (NPM declined to comment on the question of yelling during meetings, and didn’t directly address the question of "testing.")
From its founding, NPM had prided itself on enforcing strict boundaries around work-life balance. But Bogensberger soon set aggressive product release timelines that required some to work nights and weekends — something previously taboo — that contributed to an overall feeling of being overworked, according to five former employees.
The New York Times recently reported, too, that Bogensberger used an off-site meeting in Napa to present "slides warning employees not to be dramatic," which it said was taken by employees as a rebuke to their concerns about the pace at the company.
Former chief technology officer CJ Silverio told Business Insider that she clashed with Bogensberger after he pushed her teams to "crunch" and put in even more hours.
"He was attacking the core of how I run engineering teams, my basic values of what I think is important and what a sustainable management strategy looks like," Silverio said.
Several former employees also say that Bogensberger’s arrival heralded a shift in NPM’s corporate culture: Where before, the company had consciously tried to keep team-building events from centering around alcohol, former employees say that Bogensberger frequently took employees out drinking, and that alcohol started playing a larger role in NPM’s corporate culture. The decision to host an offsite meeting and social events in California’s Napa Valley wine country, a common locale for startup team-building events, disquieted some employees, for example.
"It’s not an issue, and it’s not a fundamental part of our culture, and it never has been," Schlueter said on the subject of alcohol at the company. An NPM spokesperson said that employees are not pressured to drink, and that "no event is ‘centered’ around alcohol."
Even Bogensberger’s sartorial choices made him stand out. One former employee said that NPM thought of itself as serving the "pencil necked and purple haired and queer open source community." Bogensberger in contrast typically dressed in a polo shirt, jeans, and the NPM-branded Converse sneakers the company makes for employees, the former employees said.
It also didn’t help matters that Bogensberger took over a conference room — one of the few with a clear view of Lake Merritt — to be his private office. A spokesperson for NPM said that Bogensberger didn’t choose this room, and that it was assigned to him before he arrived.
The big hurry
The big hurry was to launch NPM Enterprise, a paid product for businesses, and Bogensberger’s big bet on the future of the company.
"Our revenue is what can fund our core operations," Schlueter said. "That has required doing a lot of things in a grown up, more business-y way." And NPM Enterprise was the flagship of this strategy.
Concerned employees went so far as to write a letter, sent to management, saying employees were being overworked and facing "unrealistic" deadlines with little guidance. It urged the schedule for NPM Enterprise to be pushed back because of concerns about the product’s readiness and security: "We have set a product launch deadline that makes it necessary to release a product that is not up to our standards, which puts us at high risk of compromising our market position," the letter said.
The product ultimately launched in February, in line with Bogensberger’s schedule.
"The pressure leading up to the launch was so at odds with the culture that attracted me to the company and other people to the company, " a former employee said. "It’s completely contradicted to the handbook and the statements our founders had made."
"[NPM said it] didn’t have a culture of burnout and being crappy to the support team. We were presenting ourselves as not being that, but we were in fact being that," the former employee said.
An NPM spokesperson said that "no employee is asked nor expected to work nights and weekends." The spokesperson said that the former employees who felt otherwise "seem to confuse working hard towards a shared purpose of supporting the community and becoming customer-centric with ‘intensity.’"
Silverio said another sticking point were jokes made by Bogensberger about shutting down the public registry, NPM’s original and most popular service and a free service considered by many to be so crucial, several NPM employees said they originally came to the company just to work on it. Silverio was dismissed by NPM in November.
The NPM spokesperson said that any comments made by Bogensberger were in the spirit of trying to understand why the service is so crucial, and that he recognizes "the public registry is the heart and soul of the company."
‘A deep atmosphere of fear’
Things came to a head in March, when NPM dismissed five employees, citing a reorganization. The company issued an apology after it was widely criticized for its handling of those layoffs, and characterized them as part of the growing pains of making the company more sustainable.
Whatever the reason, the layoffs sowed discord and discontent among employees, sources say. They estimated that two or three people resigned from the 50-person company every week for a little while after.
"Now there’s definitely a deep atmosphere of fear," a former employee said.
The motivation for the layoffs wasn’t always clear, former employees say: The company had said that the layoffs were because of a reorganization, but it put up a job posting with a similar job description as one of the affected employees immediately afterwards, they say. NPM says that "the previous engineer was laid off because they could not satisfy the requirements demanded by the company’s strategic direction."
Even messaging app Slack, which had once served as the social hub for the company, came under suspicion: Sources tell Business Insider that NPM executives requested private chat logs between employees. (The NPM spokesperson says that this came "as part of a legal matter on the advice and counsel of our attorney.")
The former employees say another demoralizing episode came when the company’s employee handbook, containing its policies — one more relic of NPM’s original culture — was deleted from the company intranet. This was concerning, sources say, because that handbook laid out procedures for parental leave, vacation, and reporting sexual harassment. Without it, sources say, there’s little guidance on how to handle those and similar situations at NPM.
Three of those employees say that executives promised to replace it, but that they’re still waiting. NPM says that making a new one is a high priority.
The Wombat Developer Union
Others have a more sinister explanation for those layoffs. Four of the five dismissed employees were involved in unionization efforts, sources said.
Prior to the leadership transition, employees openly talked about unionizing, a former employee said. They called this concept the "Wombat Developer Union," or "wdu," because the initials look like "npm" upside down. They even made laptop stickers.
"We would joke about it openly," the employee said. "It wasn’t like we were afraid."
Things got more serious earlier this year, when NPM’s workforce discussed actually starting a union, a former employee said. Employees faced increasingly long hours, often stretching through nights and weekends, all to meet what they see as arbitrary deadlines. For example, a designer had to work nights and weekends to meet unrealistic deadlines, but was fired shortly after the launch, two sources said.
Five people filed complaints with the National Labor Relations Board (NLRB), and NPM settled with three of them. Initially, NPM only offered a dollar for settlement, in addition to back pay, according to a source familiar with the matter.
An NPM spokesperson disputes this, and says ultimately, it agreed to a settlement where each employee received "back pay, interest on the back pay, reimbursement of some small expenses and the severance benefits we offered them at the time of their dismissal."
Voss, who describes himself as a socialist, said he was unaware of unionization efforts.
"While I was at NPM, no one ever came to me and proposed to unionize," Voss told Business Insider. "If they had proposed to unionize, I would be in favor. It was really a huge surprise for me that we received that NLRB complaint."
Likewise, Schlueter said: "People who are saying I’m a union-buster don’t know me very well."
With all that’s transpired, sources say morale at NPM shows little signs of improvement.
In May, Schlueter cut an all-hands meeting short after employees spent time lavishing praise on coworkers who were preparing to leave NPM, according to two people present. In June, someone anonymously sent the book "Corporate Finance for Dummies" to chief operating officer Dawn Umlah, in an apparent statement on the company’s handling of the business. NPM says that Umlah donated the book to charity.
What’s more, GitHub — owned by Microsoft and backed by its capital and technology — recently launched a direct competitor to NPM.
Still, Schlueter says NPM is working to find ways to address those concerns of employee burnout. In May, NPM was restructured to have engineering, security, product, and support all report to chief technology officer Ahmad Nassri, in a play to free up resources and streamline processes.
"Burnout doesn’t just happen from working too much," Schlueter said. "Burnout happens in ways that feel unproductive. We have worked to take a look at where we didn’t do as well as we hoped. Moving on from that is identifying the communication structures between product and support and engineering."
Two sources also felt NPM did little to promote or invest in people of color, as it was rare to have them in management positions. The company says that it’s made progress on this front, and that a year ago, NPM only had one woman and no minorities on the executive team, but it has now achieved gender balance across the company and continues "to focus on achieving the same improvements racially, as does most any responsible company."
Most of all, former employees expressed concern over what this turmoil means for the future of NPM, the service. If NPM fails, it would pose a serious risk to the public registry’s future. These stumbles affect more than just 50 NPM employees, they say. An exodus of talent leaving impacts the 11 million developers who use the platform, and then all the people who use the software that those developers build. It could detrimentally impact the whole internet ecosystem.
"It’s disappointing to me personally," Silverio said. "I wanted to work for this company because I believed in the mission, and I also came to believe the founders when they said what matters to them. It’s a shock to find that [Voss is] actually completely willing to sell out all of his values for money, for a shot at making his stock options worthwhile."
As for Voss, in July, he announced he was resigning from NPM, where he served as chief data officer.
"As a cofounder, having been there for five years, there’s all sorts of things that go into that decision," Voss said. "It was a very complicated and difficult decision, and that’s all I want to say."
Schlueter, who remains with NPM, says that he’s committed to the company’s original ideals. Whether staying independent or getting acquired, he’s not attached to a specific outcome — as long as it sustains the registry.
"Whatever I do, I’m going to be weighing it on the benefit of the registry," Schlueter said. "That’s why I started this company. It was the best option in order to create a level of sustainability. This is my intrinsic motivation regarding this. Just to lay it out, if I had two exits, if one had more money but the other put the registry in a better place, I would take a smaller payout."
Read Bogensberger’s full statement:
"Our long-term mission is to keep the registry running and free to all. Isaac Schlueter, the creator of npm, founded npm, Inc. in 2014 to insure the registry would be self-sustaining and available for free to the millions of users who depend on it over the long term.
"An open source project needs more than passion to thrive. The sustainability of a free service like the npm registry requires people and infrastructure, and both are expensive. We define sustainability as the ability to build a viable business through proactive, value-adding community engagement, the development of mutually beneficial partnerships and the sale of commercial products that meet the needs of developers at startups and large corporations alike.
"The current team at npm, Inc. is working hard to finally deliver on the company’s original mission to become self-sustainable. Like most startups, we are working toward a future where we don’t depend on venture capital, but instead generate revenue from commercial customers while continuing to improve the free services such as we’ve done over the past year; by overcoming major scaling issues with our legacy technology, improving npm Audit availability as well as delivering improvements to the registry’s search functionality. We have made great progress on those projects in addition to meeting our commercialization goals, and I am extremely proud of the current npm team that is making it all happen."
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