Last week, Jack Conte, the CEO of Patreon, announced in a six and a half minute YouTube video that he was firing 36 staff.
It did not go particularly well. Although some credited Conte for his candour and authenticity, many found the video’s message muddled and self-indulgent as he tried to discuss raising $150 million in financing whilst also justifying the firings.
Now, most of our readers are not CEOs of multi-billion dollar startups planning a layoff, so why are we here?
We’re certainly not here just to dunk on Jack. Patreon is a fascinating company trying to solve the problem of how we compensate creators for their work - Wired published a great profile here. The video announcement seems honest, but flawed.
And because of it’s flaws, the video is an excellent example of the difficulties of communicating, and the pitfalls it’s easy to fall into. Regardless of whether you’re a billion dollar CEO, or just a manager in a weekly team meeting, a lot of the fundamentals of communicating are the same. We often learn the most from others' mistakes, and this is one of those opportunities.
So let’s spend just six and half minutes with Jack and learn a few things.
We can take this back one step further - why do we communicate at all?
If that sounds like we’re heading into some philosophical wasteland, don’t worry, we’re not. It’s genuinely useful to think about (briefly).
We communicate because we’re trying to create a change in someone else’s thoughts about something. (Credit to Roy Rapoport whose more elegant framework I have simplified here). This could just be by giving someone more information on a topic, but it could be more complex, like changing someone’s opinion, or making them feel differently about a subject.
Successful communication often means being very deliberate about those things:
That may sound over-engineered for more routine forms of communication, but if you think about the last Whatsapp message you sent, even that will fit into this framework (go on, take a look). After all, if you’re not changing someone’s thoughts about something, even in a minor way, what’s the point of communicating in the first place?
The stakes are obviously pretty low if you’re just Whatsapping to let your partner know you’re out of groceries, but even as they get higher, to a team update, a performance review, or a layoff, the same framework for successful communication applies.
Which brings us back to Jack. We’re going to look at some of the things he said to see if we can work out the change he was trying to achieve and whether he was successful in that.
‘Hi creators I have some tough news to share with you today.’
A pretty good start.
If you listen to his words, it’s clear who Conte’s key audience for this video is - the creators on his platform, the key constituency for the success of his business. He repeatedly addresses creators by name again later on.
The issue is that it’s a Youtube video, so in reality the audience is… everyone.
Because of the medium he has chosen, he has opened up the possibility of creating a change not just in his intended audience, but anyone who views the video. This includes Patreon employees, ex-employees, potential employees/job seekers, shareholders, journalists, and worst of all, tech twitter. Creators who might be prepared to be more generous in their interpretation of his words don’t constitute the whole audience.
This is where things start to get difficult.
To try and work out what he’s trying to do, here’s some select comments from the video. We’ve tried to capture the important moments.
00:04: ‘Patreon just let go of 36 teammates’
00:16: ‘The company’s in great shape financially, we just raised $155 million in cash’
00:22: ‘I’ll get into the reasons in a minute but I just wanted to start with the fact that this is on me and I don’t take that lightly’
01:00: ‘It’s not the first time Patreon has been through something like this but it is the first time I’m making a video about it because I think as Patreon gets bigger and more well-known it's especially important for me to not just make videos when there’s good news and exciting things to celebrate and talk about but also to talk through hard news and explain some of the difficult decisions’
01:26: ‘It’s just to get information out there and to have this moment with the community’
01:40: ‘I think the first thing that’s probably on people’s minds is why. Why are you letting go of 36 people and I’ll answer that in a second but before I do, I just want to say that the people that are leaving Patreon today are great people’.
02:14: ‘Every time something like this happens, it’s ultimately the responsibility of the CEO… I can’t make this video without acknowledging that and taking ownership of it.’
02:34: ‘So why, why did we do this, and the answer is we’re shifting the way we build products and operate internally and we needed different sets of experiences and different types of expertise in order to make that shift.’
02:49: ‘Two months ago we hired a new Chief Product Officer Julian Gutman, and we hired Julian because we knew we wanted to make Patreon the best product in the world, for creators to run their businesses and for fans to have amazing content community experiences in the apps.’
03:20: ‘It’s actually been a really exciting and inspiring process to go through that because there’s so much we need to do.’
04:05: ‘For the teammates that are being let go, this is such a tough thing to go through.’
04:19: ‘We wanted to make sure that folks had enough help from Patreon to get them through the transition.’
04:28: ‘I’m not going to get into the details of the package we put together to help folks with that’ (He does actually go into some detail - 3 months salary, extended medical care, vested stock options).
05:30: ‘Patreon is going to be a stronger company for having made this decision. In the past there have been these headlines sometimes which have unnecessarily scared creators and I don’t want folks to be scared about the company. We’re growing faster than we’ve ever grown’.
Now, we don’t know what exactly was going on in Jack Conte’s head. But from these excerpts we can use his words to get a pretty good idea of what he was trying to achieve:
Now watch the video back, how well did he do on inspiring those changes in his audience?
To our minds… not particularly.
While he ultimately covers off all the points above, the order and way he does it undermines the overall change he's trying to create.
Or to put it in terms that Conte the musician will appreciate, this appears to be a case of all the right songs, just in the wrong order, and played badly.
Let’s take it point by point.
This section starts well, he cuts straight to the chase on the detail of the layoff and how many people have been affected. But that’s where it stops. The obvious next question, as he later acknowledges, is why this is happening, and we have to wait until 2 minutes later to find that out. As an audience, we’re left confused and wondering what’s really going on. For the conspiracy-minded and/or those who didn't watch to the end of the video, that was enough to start filling in the blanks with their own (less generous) theories about the company's strategy.
He’s clearly in a rush to address this. As soon as he’s mentioned the layoff, 12 seconds later, he wants us to know that ‘we just raised $155 million in cash.’ But again, he doesn’t spend much more time on this point. Less than ten seconds later we’re onto why he feels bad about the firings. We don’t get any more detail about what Patreon’s doing with the money and why we should feel good about the company going forward. This detail eventually does come, and it’s pretty good when he gets round to it, but that’s five minutes later. In the meantime, we’re left largely in the dark about the state of the company beyond its cash position.
We’ve already mentioned it took too long to get to this. But not only that, he keeps teasing us. On 22 seconds he says, ‘I’ll get to the reasons in a minute’. If only it was a minute! It takes more than that for him to reiterate that the reasons are important, only to put it off again to speak about how great Patreon’s employees are. He only actually gets round to this crucial information 2 ½ minutes in. By which point most of the audience is just upset that he’s announced a round of firings and $155m in cash, with no detail to reconcile the two. And in the meantime, he’s chosen to speak instead about how hard he’s found the decision.
We suspect it’s this particular dynamic which led to memes like this:
If as part of ‘getting the information out there’, Conte had given a cogent explanation for the layoff in the first minute, we suspect the reaction to the video might have been different.
Compassion is most effectively demonstrated in actions rather than words, so telling the audience exactly what Patreon’s doing for the employees who’ve been fired is a good move. But he then goes on to say ‘I’m not going to get into the details of the package’. Why not? Interestingly, he catches himself here and does tell us more about what the employees are getting, and it's generous. Maybe he realised he’d made an error. This ends up being one of the stronger parts of the video.
Conte’s tone throughout the whole piece is halting and sombre. He regularly seems to be on the verge of tearing up. He appears to appreciate the weight of responsibility and that it’s his to bear. But. And there’s a big but. His feelings are not the most important thing here. And by pivoting to talking about himself only 22 seconds in, before addressing the detail of the layoff or the measures to protect employees, he undermines a lot of the credibility that may have come his way on this front.
Now, all this analysis comes with a huge caveat. We’re not Patreon creators, who were the specific target audience for this video. It may have landed much better with them, in which case, mission accomplished. But we suspect that isn’t the case.
And as we discussed, because he made a video, the audience is by definition much broader, and includes a wide range of stakeholders who also matter to Patreon’s success (albeit in a more minor way).
We’re sure he rehearsed beforehand, but as we’ve seen from breaking down the video, it has all the hallmarks of not being prepped enough to have the desired impact. If there was actually a deliberate structure around the messages he wanted to get across, and the best order in which to do it, we’d love to see it. It’s a really stark reminder of how important it is to get that right.
Regardless of the amount of prep though, we know that sticking the landing on communication like this is difficult. Demonstrating conviction in your decision and confidence in your business whilst also showing compassion for those affected is a narrow tightrope.
It’s probably why many leaders choose to communicate updates like this in writing - see recent examples from Carta and Lambda School. We’re not saying these are perfect examples, and good writing is a great skill, but on paper you can make sure exactly the right words come out, in the right structure, and it can be easier to control tone.
The Carta example is actually a transcript of the CEO’s speech to employees internally. In it, he explicitly says he’s reading off a script, likely for this reason:
‘First, I want to apologize if I sound matter of fact or even robotic. It is my way of coping. I wrote a script and I am reading from it. There is a lot I need to say and I don’t want to forget anything. And I’m worried I may not get through it all without something to lean on.’ Henry Ward, CEO of Carta
So why didn’t Conte put it in writing? Well in April last year, Patreon also laid off 13% off its workforce and got some blowback on the statement they provided to the press (which for the record was cold and lacked empathy). We imagine Conte felt a video on his channel would chime more with his creators and couldn’t be worse than what happened last time.
Well, it may not have been that bad. But as we’ve seen, there’s still some room for improvement. Hopefully though, there won’t be another one anytime soon.