Pivot3 Mass Layoffs

By John Honovich and Sean Patton, Published Mar 27, 2020, 01:40pm EDT (Info+)

Pivot3 has conducted mass layoffs, the culmination of grand hopes, a quarter of a billion dollars in VC funding, and multiple failures to gain mass-market success.

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In this note, we include feedback from Pivot3 management and examine their steps and missteps over the last decade.

Pivot3 Statement

Pivot3 said that the layoffs were part of structural changes related to coronavirus:

This market disruption has caused many of our customers to delay their decisions and to pause projects while they evaluate their own situations. There is currently very little indication of how long this situation will last. We are committed to continuing support for our customers and partners, so this morning Pivot3 undertook some structural changes to ensure that we weather this situation, however long it lasts, and continue to support our customers. We believe that Pivot3 will emerge stronger for these changes, and fully intend to continue providing solutions of exceptional value for our customers through this market crisis and beyond

Mass *******

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**** *** **** **** ** *** final **** ** *** ****** *** Pivot3. ** **** ** *********** ** see ** ** *** ****** ****** yet *****.

Another *********** ***?

Comments (35)

Unfair poll.

not enough people can make this judgement.

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Good reporting Sean!

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I just got off the phone with a Pivot3 employee. The conference call told them very clearly that their VC had pulled funding, and that other than a skeleton crew - Pivot3 was finished as an entity

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Oh please.

The employees that were laid off got fired via WebEx or some other recorded video conference system. The "CEO" sat with his face filling the camera view and said "if you are watching this, you no longer have a job". They short paid by 2 days each employee that was let go, and cut benefits. There are employees scrambling to get expenses into system and paid- be interested to see if they actually pay.

Of course, while the "CEO" fired 75%- including all of the new channel people recently hired- the executive staff was held over. This includes the new CRO and all the sales leadership. While I do think this group was given a seriously difficult situation to rectify, I also think they are all in way over their heads. When the CRO tells you that your job is to be a channel manager in the West but also to help then grow from $4mm to $20mm, you know there is something amiss. The new CRO may have been sold a bill of goods but he sold one down the line as well.

I was there for all of 6 weeks and I believe that this was always going to happen. The pressure on sales was immense- so much so that the sales team was going into integrators and asking to do sales planning and revenue mapping. There was no real support for a channel program; they wanted it done in 2020 when it needed a multi-year investment.

I cannot provide concrete proof on what I now write but I believe the truth is as follows. The investors into Pivot3 (one of which was an investor in Solyndra, where Bill Stover was the CFO) funded Pivot3 at the start of each year after a budget was submitted by management. This year the investors only provided budget for 6 months. The sales goal was $75 million in 2020 (may have been lowered) which would have been close to a doubling of last year. I believe that the investors had drawn a line in the sand and said "hit this number or we are all done". I think the COVID-19 crises simply accelerated what was always going to happen mid-year, which was the investors (finally) deciding that they had seen enough of yearly failures and empty promises.

I was at Pivot3 for 5 weeks. I looked into the leadership, I did research and I listened to people talk. I saw the writing on the wall and I left. The Pivot3 product, while expensive, was a good product overall. This decade plus failure lands at the feet of the hubris of various leaders and management, who could never stomach the idea of making a true corporate change. I feel awful for my former colleagues and contempt for the management team who lied to me when I was hired and lied to the people at Pivot3.

I would not believe a word from the management of a company that has squandered $250mm of investment with nothing substantial to show and years of repeat failures.

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Yep, we got paid expenses.

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I never liked their model. They should have entered the raid controller market rather than try to go huge dollar storage sales with minimal margins.

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Pivot3's PR Agency Compass is the like Grim Reaper of video surveillance firms:

Does Compass only work for struggling companies or do only struggling companies pick Compass?

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Yikes! Not sure which answer to your question is worse?!?!

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there are only a handful of pr companies that cater to security companies, eclipse, compass and LRG are the bigger ones that come to mind.

the reason to what you point to is that when people move between jobs they continue going back to the PR companies they know, so if I worked for pivot and moved to pelco, I'll continue using compass.

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No, that's just not it, at all. LRG and Eclipse get stronger clients and keep them longer than Compass. This is something I know very well since no one covers these companies more than IPVM so we have non-public information about who companies use and how they perform.

Overall, though, I would say the biggest, strongest companies in video surveillance tend not to use outside PR / marketing firms.

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It's about time for these guys to just stop altogether. The consistent employee turnover over the years is just disgraceful. Pack it up, P3, you're done.

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Another company that Rance messed up. He is all talk... He says he knows how to run a sales company and brags about running Panasonic laptops for years, but doesn't actually do anything. When that division took over other Panasonic divisions, he ran them into the ground until they forced him out.

Reminds me of a Pigeon.

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Another company that Rance messed up

I don't think it's fair to give Rance much credit here. Pivot3 has a decade of problems before Rance even stepped in a year ago. That said, why would he join a company so obviously in bad shape like Pivot3?

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Btw, according to Poehler's 2020 biography he positioned Pivot3 for 2-3x growth this year:

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I feel bad for the employees, but I can't say that I'm surprised. I never understood how they actually stayed in business. Hearing the sales guys talk about customers reminded me of a guy in junior high school talking about his "girlfriend" from the summer.

"You wouldn't know her - she's from Canada."

I never met a Pivot 3 end user, quite honestly, do any exist?

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I worked on a good sized airport refresh that purchased racks-on-racks of Pivot3 boxes. So there's that.

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Is that airport... In Canada? :)

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I had to google that line - Breakfast Club:

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I know that deal... that was a great deal. Not easy to sell a box that's priced 30% higher than the competition. Execs under estimated the damage and the subsequent cost that turnover had, they made bad strategy decisions, they preferred supposed pedigree rather than actual channel strategy. John is right, this was sort of inevitable for a long time. They started in 2003.. it's hard to be a start up for 17 years. Yes, I feel badly for the good people at Pivot3.

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I never met a Pivot 3 end user, quite honestly, do any exist?

They have some big customers but overall very few. Your point is not literally true but it's not far off either.

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I was a Pivot 3 end user while at my last employer. However, this was for a single Storage array for a system with almost 600 cameras.

We had explored additional storage arrays for other large facilities with large 150 - 500 camera deployments. Not sure if my previous employer ever did that deployment.

I moved on from them and onto a new gig.

However, when i worked with P#, I never met a staff member that was not capable, helpful, etc. However, I did notice the turn over.

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Damon, by and large the folks at P3 with whom I worked were all great people and doing all they could to make the company reach some sort of financial stability. This includes the new members of the channel sales team (all of whom got fired after 7 or less months in their jobs). My disgust is for the senior people- Bill Stover, Cathy, Bruce, Dan Flood, and the people they brought in to work there. I grant that the company they were handed was already a right mess, but Dan Flood lied to me and a bunch of other folks during the hiring process and beyond. I mentioned that the Argonaut people had pulled out in January (20%) which is before I started. Would have been nice to have Dan Flood tell me that and be honest about the challenge that lay ahead as opposed to criticizing my choice in professional clothing and telling me not to try and help the company with such things as OEM for a major access control company, or lowering cost of hardware through a different provider.

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this really sucks. I have some good friends there.

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Some amazing spin from Pivot3 to a storage website:

“In a situation like this, the responsible approach is to make some strategic and structural changes to our business to preserve resources and to ensure our continued ability to support our customers, who in many cases depend on us for mission-critical deployments.

“We are adjusting the size of our team and staying focused on our core mission. We have preserved all key operational aspects of our business so that we can continue to market, sell, service and support customer solutions. As this situation develops and we explore options, we remain committed to timely delivery and exceptional support of our customers and partners.

This health crisis has created some uncharted waters for us all to navigate; we’re confident that the changes we’ve made will allow us to weather the storm and emerge stronger on the other side.” [emphasis side]

Yes, it's coronavirus' fault - sarcasm. This is not a new thing either, Pivot3 has done this happy talk spin over and over again.

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Someone call the CMO, or the CRO. Ask them what happens in mid-April. Ask them what happens when the money is 100% gone. After all, the equity investors have pulled out (Argonaut left in January of 2020) and they have no income of which to speak, or use. Little hard to support customers and stay focused when you cannot pay your employees.

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Boy Dan Flood and the crew must be just chortling! They fired all those people, clawed back all of the shares they held, and have contacted a few salespeople to come back. The latter is surely to try and save business deals. The former is all personal enrichment. Good luck with that, C suite. Each of you is really covering yourself in glory during this time of worldwide crisis.

Maybe when you have finished this you can all go work at Athena.

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Here is Pivot3's very own CEO in front of Congress after a bankruptcy...which came right after a massive, DOE backed injection of funds and a (shock) mass layoff that allowed stock clawbacks.

User Clip: Stover | C-SPAN.org

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Certainly, this webinar was booked before the emails but it may still go on:

Typically, companies ignore bad news in paid-for events but I am curious how they will handle the gutting of their company.

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I am a former employee with Pivot3. I began to notice irregularities in my variable comp. I was terminated after raising my concerns to Sales Management. Don't trust the lot of them.

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We need a list of debacles. Firetide always came to my mind when I followed Pivot's woes.

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Really, Anthony?

I thought the obvious choice was Intransa :)

Intransa in Trouble, Entire Intransa Staff Laid Off, Intransa Wind Down Investigated

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True, I forgot about them. Remember Iron Sky too.

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It was all because of those damn clogs!

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I believe you are referring to the green Crocs (rubber clogs). We all must admit, they were definitely memorable. And I can say from experience that they were very comfortable (if not completely humiliating).

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