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I indicated in our last monthly update that we’re seeing around 75% of our enterprise clients freeze all hiring (including usage of the Braintrust platform). In the last month we’ve only seen the slowdown get worse. Earlier this year we had ramped up hiring in anticipation of more growth, not less, so this week we decided to reverse those bets in order to preserve cash and keep the business financially sustainable. That reversal involved a decision to lay off 40% of the Freelance Labs staff (~28 FTEs), institute a 10% pay cut across the board, and pause all paid marketing initiatives. We will remain focused on automation & GSV efficiency until demand returns, at which point we’ll expand back to hyper-growth mode.
These cuts, while painful in the short term, ensure that we will survive this downturn and will never need more outside capital as the balance sheet is strong. This is not a change in strategy or a reflection of our business model viability. We’ll continue to invest in self-serve on the product side (efficient client funnel), the Professional Network for low-CAC talent acquisition and sophisticated, AI-based automation in order to keep OpEx very low once the demand comes back to the network.
Some good news in the last month:
- The Professional Network launched to the public (press release) with a ton of interest from mentors and mentees and already has over 11k weekly active users (WAU). Here is a video of the live launch event myself and our GM Elena did.
- Despite the climate, we’re still adding new logos and managing to expand some existing accounts. We had the most new enterprise clients on platform since Dec 2022. 29 Ent clients posted jobs in May. 26% increase MoM. 100 enterprise jobs posted, highest since 1/23 (67% incr. MoM)
- We also launched a partnership initiative with Deel which is already bearing fruit by bringing new clients onto the platform at $0 CAC.
- The talent side of the network continues to explode - another record month of signups (very low CAC, approaching zero).
Other things we’re doing:
- We’re keeping a close eye on the regulatory developments (attacks) and have daily communication with our legal partners at Fenwick, and close ties with our partners at Coinbase, participating in their Public Affairs Coalition. ICYMI, Jeff John Roberts at Fortune compiled research showing that Gary Gensler has been deliberately pre-empting congressional rulemaking.
- As I mentioned in the last update, we’re applying new, internal LLMs in every department of the core teams and back end network operations.
Thank you to everyone who has reached out and offered to help. We are grateful as always for the support of this community.
Any questions, comments, concerns, please don’t hesitate to reach out.
All the best,
Adam
Join Braintrust: https://app.usebraintrust.com/r/adam3/
Braintrust dashboard: https://info.braintrust.com
Podcast: www.adamjacksonshow.xyz