Ceasing operations, unpaid staff, more

Home » Ceasing operations, unpaid staff, more
Ceasing operations, unpaid staff, more


Brydge, a once thriving startup making popular keyboard accessories for iPad, Mac, and Microsoft Surface products, is ceasing operations. According to nearly a dozen former Brydge employees who spoke to 9to5Mac, Brydge has gone through multiple rounds of layoffs within the past year after at least two failed acquisitions.

As it stands today, Brydge employees have not been paid salaries since January. Customers who pre-ordered the company’s most recent product have been left in the dark since then as well. Its website went completely offline earlier this year, and its social media accounts have been silent since then as well.

Those former Brydge employees largely attribute the company’s failure to mismanagement during growth, misleading statements from its two co-CEOs, and an overall toxic working environment that led to a high turnover rate.

HengeDock

In January, Brydge opened pre-orders for a new version of its ProDock, the Thunderbolt-enabled docking accessory that Brydge started selling following its acquisition of HengeDocks in 2019.

That acquisition went about as smoothly as such a deal can, sources said. HengeDock higher-ups stayed at Brydge to ensure a smooth transition of the intellectual property and other logistical necessities. HengeDock CEO and founder Matthew Vroom left the company in November 2019 shortly after that acquisition was finalized.

Once the HengeDock acquisition was finalized, Brydge had a growing product lineup that stretched beyond the high-quality, Apple-inspired iPad keyboards that led to the company’s initial success. A growing sense of optimism spread inside the company.

Brydge Pro+

Brydge Pro+

Brydge was a direct competitor to Apple’s keyboard accessories for iPad, but the company set itself apart with higher-quality aluminum materials, a laptop-style hinge and form factor, and keyboard backlighting. Brydge could coexist in the market as an alternative to Apple’s less laptop-like Smart Keyboard Folio accessories.

Behind the scenes, Brydge was also working on a major expansion of its product lineup: a version of its iPad keyboard accessories with a built-in trackpad. Brydge, based on previous reporting, was working on versions of its iPad keyboards with trackpads since 2018.

In October 2019, the company gave a teaser look at the Pro+ keyboard and trackpad accessory for iPad Pro, while also filing a lawsuit against Libra for what it claimed was a knockoff of its product. The lawsuit was settled out of court when Libra agreed to change its design to avoid Brydge patent infringement. Inside Brydge, the company’s patents were one of its most valuable assets, the people explained.

Brydge formally announced the Pro+ at the Consumer Electronics Show in January 2020. The company had a booth at CES where it showcased the new accessory, allowing attendees to spend time with the product. Brydge opened pre-orders for the Pro+ and it began shipping shortly thereafter.

Tough start

Apple Magic Keyboard for iPad Pro

The response to the first iteration of the Brydge Pro+ was mixed at best. At that point, iPadOS 13 didn’t offer native trackpad support, so Brydge was forced to rely on a workaround using Apple’s Assistive Touch accessibility feature. It was far from an ideal solution, and the early reviews made that clear.

For instance, Jason Snell at Six Colors criticized the trackpad as not being “remotely close to Apple’s trackpads in class.” He described the final product as being an “imprecise, jerky experience” that was simply “no good.”

Just three months later, Brydge was hit with a major surprise when Apple unveiled the Magic Keyboard for iPad Pro, its first iPad keyboard accessory with a built-in trackpad. Alongside that, Apple released iPadOS 13.4 with native trackpad support without using the Assistive Touch accessibility feature.

iPadOS 13.4 did not make the full suite of trackpad capabilities offered by the Magic Keyboard available to third parties like Brydge, however. Other companies were unable to tap into three-finger gestures for multitasking and app-switching. This gave the Magic Keyboard a significant advantage over what Brydge was able to offer.

Reviews of Apple’s Magic Keyboard for iPad Pro proved that point. The product, despite its higher price point, was widely praised for its industry-leading trackpad experience, the unique and versatile cantilever design, and its built-in USB-C port that could be used to charge the iPad Pro.

Unexpected competition

Making matters worse for Brydge, Apple was working closely with Logitech. When iPadOS 13.4 was announced with trackpad support, Logitech unveiled its own keyboard case with trackpad integration for iPad and iPad Air with full support for Apple’s multi-touch trackpad features.

Brydge had no indication Apple was working on the Magic Keyboard or with Logitech, the people said. This led to internal frustration at Brydge, people familiar with the time period told 9to5Mac. The sentiment among Brydge executives and employees was that Apple left them out to dry while giving Logitech special access to its software.

Apple later directly reached out to Brydge to begin working on opening up its trackpad framework, the sources indicated. Brydge CEO Nicholas Smith is said to have taken the lead on this relationship thanks to a contact he had at Apple.

Apple’s involvement

apple remote work

Apple wanted Brydge to take the lead on unpacking its framework used by the Magic Keyboard in a way that allowed third-party accessory use. The company essentially put all the pressure on Brydge to accomplish making sense of its framework.

Inside Brydge, this was still a huge step in the right direction, former employees explained. The company had the firmware they needed from Apple, and it was their job to take that firmware and adapt it to the Pro+. A former Brydge engineer described it as one of the highlights of their time at the company.

It was a tall order, but one that would have major long-term benefits for Brydge and its relationship with Apple if it got it right.

At one point in the early conversations between Apple and Brydge, Apple questioned whether Brydge was ultimately the right partner for this project, the people said. In Apple’s eyes, Brydge needed its help too early in the process. It was asking the wrong questions and at the wrong time.

The relationship eventually developed into a back-and-forth system of Brydge doing everything it could with the firmware Apple provided, then seeking help from Apple engineers. When it hit a roadblock, it would reach out to Apple and explain the problem. Apple engineers would investigate and give Brydge engineers suggestions on how to resolve the issues.

Still, Apple kept many of its tools out of reach for Brydge. Apple refused to give Brydge any sort of debugging tools or additional information, sources said. It was a back-and-forth process between the two companies.

While work on full trackpad support was going on inside Brydge, the company continued selling and promoting the version of the Pro+ with mixed reviews. Multiple former employees who spoke to 9to5Mac indicated that this was a controversial decision. The Pro+ that was on the market simply couldn’t compete with the Magic Keyboard. It also suffered from a high return rate of over 20%.

Brydge’s cash flow position over this period in 2020, however, was incredibly tight. It was unfeasible for the company to pause sales of Pro+, as the product was its primary source of revenue. The company wouldn’t have survived without those sales.

At the same time, Brydge was bound to strict confidentially as part of its relationship with Apple. It was unfeasible for the company to pause sales of Pro+, but it also couldn’t actively promote the new firmware that it knew was in development and would be a major upgrade for the product.

Brydge eventually shipped full multi-touch trackpad support in February 2021. This was nearly a year after Apple had released its Magic Keyboard and Logitech released its Combo Touch Keyboard Case with Trackpad. Even though it was playing catch up, Brydge had achieved its goal and worked closely with Apple to roll out a major upgrade to its best-selling product.

Polarizing CEOs

Brydge co-CEO Nicholas Smith

Brydge always operated under a two-CEO structure led by Nicholas Smith and Toby Mander-Jones. In conversations with 9to5Mac, former employees described Smith as most passionate about product and marketing, while Mander-Jones cared more about the financial side of the business.

Serving atop the company, Mander-Jones and Smith were viewed as very polarizing CEOs.

Multiple former Brydge employees described both as having large personalities, pride, and inflated egos. Some Brydge employees interpreted this as a passion for the company and growth, which would benefit everyone. They might not be the easiest people to work for, but Brydge was successful, and the pay was good.

Other people, however, said this led to a very hostile work environment. Multiple employees particularly pointed to Smith as being extremely difficult to work with and overbearing, with an unhealthy management style that spread down to lower-level managers and employees. Mander-Jones, on the other hand, was equally as passionate and prideful of himself and Brydge but was largely viewed as the “good cop” compared to Smith, multiple former employees said.

Brydge co-CEO Toby Mander-Jones

The difference in how former employees remember the leadership of Smith and Mander-Jones largely depends on the level of each employee. Higher-level leadership, including those in the C-suite, were more willing to push back against the two CEOs. Many of those people came to Brydge from lucrative jobs at other startups and were more than familiar with how to deal with ambitious and boisterous leadership.

Senior leaders, however, told 9to5Mac that they were aware Smith was prone to outbursts and erratic decisions. While senior managers would do their best to insulate their teams from Smith’s behavior, doing so was not always possible. Multiple employees shared stories of Smith emerging from his office at the Park City headquarters to berate an employee with expletives, usually junior-level.

On the other hand, Smith did have some employees within the company which whom he got along with. But other former employees confirmed that if you got on Smith’s bad side, you were on his bad side for good.

This leadership style, in part, led to Brydge having a higher turnover rate than typical companies – even other similar-sized tech startups. Many employees didn’t stay at Brydge for more than a year.

Former employees also attributed the turnover rate to a shift in remote work policy that took place in mid-2021. During the COVID-19 pandemic, Brydge allowed for a hybrid work policy. Employees were expected to work at least two days per week in the office. This was a point of criticism among Brydge workers.

Brydge abandoned the hybrid work strategy in August 2021 and required employees to return to in-person work full-time. This led to a handful of departures for employees who were not yet comfortable or able to work in a shared office five days per week, the people said.

All-new C-suite executives

The work with Apple through 2020 was described as a bright spot by multiple Brydge employees who worked on the project and its associated marketing campaigns. The company, by all indications, was financially healthy, and its two CEOs saw no reason that growth couldn’t continue.

As it kept pushing Pro+ sales through 2020 and 2021, Brydge significantly ramped up its marketing spend. The fate of the company largely hinged on the success of the Pro+ product. That revenue would fund the development of future products and marketing spending. After all, the product was years in the making and highly anticipated among early Brydge customers.

During this huge growth phase, Smith significantly expanded the team working around him. Beginning in August 2021, Smith hired more than 10 managers to serve in various C-suite level roles within six months, former employees said.

The addition of the C-suite led to a restructuring of teams within Brydge, including the marketing team, which saw the departure of several long-time employees.

The focus on growth – particularly on revenue – continued throughout 2021. When 2022 hit, however, things started to take a turn for the worse inside Brydge.

A lack of transparency (and CFO)

According to multiple former Brydge employees, Mander-Jones and Smith always kept a very close guard over the financial data of the company. It’s believed that very few people inside the company – if any – knew the true financial state of Brydge.

One red flag that multiple former employees cited was a notable period during which Brydge did not have a chief financial officer. As confirmed by public information on LinkedIn, Brydge had a CFO from January 2020 to October 2021, though that person had no chief financial officer experience. Instead, Brydge internally promoted someone from their head of finance role to act as CFO.

When this person departed the company in October 2021, Brydge did not fill the position, despite significantly expanding the C-suite level during this period. Instead of hiring a new CFO, Mander-Jones and Smith leaned heavily on the company’s accounting controller to fulfill the duties usually handled by a CFO.

Multiple former employees said that even the accounting controller knew they shouldn’t be handling tasks assigned to them. At one point, employees said that the account controller threatened to leave the company because what Mander-Jones and Smith were asking them to do was simply too much. The two CEOs were able to convince them to stay with a significant raise, having no intention of hiring an actual CFO.

Brydge employees had no idea that Mander-Jones and Smith were masking the true financial state of the company. They trusted their CEOs, who characterized the company as healthy.

According to multiple former Brydge employees, the CEOs touted that the company would do $25 million in revenue in 2021. Their company goal was more than double that the following year.

Mander-Jones and Smith also indicated to employees that Brydge was profitable, the employees said, something that proved to be false as signs of cash flow struggles started to emerge.

Cash flow and acquisition goals

Apple no longer the most cash-rich company

Within the company, the goal was always to be acquired, former employees said. The company got very close to achieving that goal multiple times, but the deals fell through consistently at the last minute.

The constant chasing of an acquisition is what many employees say led to Brydge’s financial struggles. Smith and Mander-Jones were fixated on growing revenue as quickly as possible, regardless of what it took. Mander-Jones and Smith operated under the assumption that the value of an acquisition would be based on a multiple of its revenue.

As they were not turning a profit, however, Brydge was constantly battling cashflow issues. This made it essential that the company get its product from supply chain partners in China as quickly as possible. The company, according to multiple employees, was paying upwards of $15 per unit to have products delivered by airfreight from China. The sooner it could receive inventory, the sooner it could sell that inventory, and the sooner it could grow its revenue.

The company didn’t have the cash flow required to use other means of transportation. Eventually, it was able to find a fast boating partner and move inventory from China to the United States to help drive down its overall cost of goods, multiple former employees said.

As Brydge battled return rates that were significantly higher than average, that put a significant strain on its cash flow. The company’s products generally had an average return rate of 20%, the people said, while some products, such as the Max+ in 2021, had return rates over 50% in the months following its release. The average return rate was helped significantly by the company’s ProDock products, which had a return rate of less than 1%.

Razer and Targus

Multiple people told 9to5Mac that Brydge was in talks to be acquired by consumer electronics company Razer and the deal was set to close in 2022. This deal progressed through multiple stages, including an audit by Razer. The deal, according to former Brydge employees, was nearly complete but ultimately fell through at the eleventh hour.

Brydge then entered talks to be acquired by Targus, a consumer electronics company that bought accessory maker Hyper in 2021. The talks with Targus began in late 2022, former employees said, after the Razor deal had fallen through.

Inside Brydge, the belief was that the Targus acquisition was one day away from being finalized and announced when it fell through. The Targus CEO had come to the Brydge offices in Park City, former employees said, to meet with Brydge’s staff and executives.

Former Brydge employees also said that, in years prior to the Targus and Razor acquisitions, there were internal rumors that Apple supplier Foxconn was going to acquire the company, with Smith touting the potential deal to employees. This deal never made it to a proper due diligence stage, however, the employees said. Foxconn did acquire accessory maker Belkin in 2018.

Multiple former Brydge employees pointed to the company’s turnover rate as a fault for the failed acquisitions. With employees coming and going at such a fast pace, Brydge did not have proper onboarding and exiting plans in place for employees, the people said. This led to internal confusion about which employees were doing what and what data being passed around was accurate.

Former Brydge employees also said that Smith and Mander-Jones would orchestrate a huge push to increase revenue right before an acquisition was finalized, hoping to drive up the acquisition price. When those deals ultimately were not made, Brydge had burned significant amounts of cash and found themselves in a worse position than they were before the acquisition talks.

Brydge also used the possibility of an acquisition as a bargaining chip when bringing on new employees, particularly when it brought on new managers in 2021. Those employees, the people said, were given shares of the company that they were told would have significant worth when Brydge was acquired.

With high turnover rates, multiple failed acquisitions, and the broader lack of transparency from Mander-Jones and Smith, Brydge employees were in the dark about the current state of the company.

Running out of cash

It took pressure from other C-suite executives at Brydge for Mander-Jones and Smith to realize the trouble Brydge was in. Multiple former Brydge employees described Smith and Mander-Jones as being reactive CEOs, with plans changing on a day-to-day basis. Other executives would outline a plan on how the company could dig itself out of the hole, and the co-CEOs would fail to adhere to those plans, the people said.

When the Razer acquisition fell through in the fall of 2022, employees got their first clear acknowledgment of the struggles Brydge was facing. In November of 2022, people said, Brydge went through its first major round of layoffs, affecting around 20% of its workforce.

After this round of layoffs, Mander-Jones and Smith treated the team to tacos in a bode to increase morale, the former employees said. They also attempted to salvage the workplace environment by rearranging the desk layout, with Smith and Mander-Jones themselves setting up desks in the middle of the office and watching employees as they worked throughout the day.

Towards the end of 2022, Brydge launched the SP Max+, a new keyboard case for Microsoft Surface Pro. This would ultimately be the company’s last major product launch, and it invested what cash it had left in marketing and inventory, the people said. As part of this marketing push, Brydge teamed up with various influencers for paid promotion of the product.

Those influencers, as is common in the industry, agreed to net-30 and net-60 payment terms, which meant they would be paid after the sponsorship campaign had been published. When those bills became due, however, Brydge had no cash on hand to pay those influencers. Multiple influencers who spoke to 9to5Mac confirmed that they had to seek and threaten legal action against Brydge in order to get paid. Eventually, most of the influencers did get paid, but it was a clear sign for Brydge employees of how bad the company’s cash flow problems had become.

From there, employees who remained at the company quickly started to notice other signs the company was failing.

In November, Brydge hired a CFO after a 12-month gap without one. The goal within the company, former employees said, was that this new CFO would take the lead on Brydge’s efforts to consolidate its debt.

In December, Brydge held its annual Christmas party at a local restaurant. Mander-Jones and Smith had set a budget for the party, the people said, and they stuck to that budget. At the end of the night, one of the CEOs put his card down for the bill. His card was declined, and a Brydge employee paid the bill instead, the people said.

Many employees who covered expenses on behalf of Brydge are still waiting on reimbursement, the sources said.

The company had also started changing the credit cards for all of its monthly recurring bills, as they’d max out one card and move on to the next card. Occasionally, a bill would slip through the cracks and a specific service would get shut off. Come January, Brydge’s internet access got cut off for an unpaid bill, a former employee said. Brydge ultimately asked an employee to put their credit card on the internet bill, promising to pay them back later.

In January, Brydge opened pre-orders for the latest version of its ProDock for Mac with Thunderbolt 4 support. The company was hoping that pre-orders for this product would give it the cash it needed to kickstart the new year, the people said. The cash from those pre-orders didn’t amount to enough to keep Brydge above water.

At the start of 2023, Brydge was served with eviction paperwork for its Park City headquarters, with all of its employees in the office to witness it. The two CEOs attributed this to miscommunication and attempted to save face by saying they were only a day late on rent, former employees said.

During all of this, Brydge was still in talks with Targus about the aforementioned acquisition. The deal was set to be finalized by the end of February. When that deal fell through, Brydge laid off another large portion of its staff the next day, the former employee said. Shortly thereafter, Brydge got evicted from its Park City offices.

Unpaid staff and missing pre-orders

Brydge Max+ versus Apple Magic Keyboard

All employees who were laid off by Brydge in that second round of layoffs are still owed paychecks dating back to January. They are owed four and six weeks of salary and most received their final paycheck in mid-January, the people said. Prior to that, paychecks had already been arriving late for most employees.

When Brydge’s CEOs announced that employees would be paid late for the second time, they did so via a Zoom meeting, the people said. Brydge employees were in the office, and Mander-Jones and Smith joined via Zoom to break the news. Mander-Jones and Smith were also in Park City at the time, at their homes just minutes from the Brydge offices.

As Brydge ran out of cash, they also had to stop paying their inventory partners, supply chain partners, and other logistical partners. Multiple former employees said that all of Brydge’s inventory and intellectual property has been taken by banks and creditors to which it owes money.

It has also been dropped by nearly all of its logistical partners because of missed payments, meaning that it was paying a higher price for inventory, shipping, and production than it otherwise would. Multiple former employees said that Smith and Mander-Jones would string along those partners by paying just enough to keep them happy, but it was eventually unable to pay anything at all.

Brydge has also not fulfilled the vast majority of pre-orders for the ProDock that it announced in January. According to a number of customers who contacted 9to5Mac, they have not received any communication from the company about the status of their orders. Multiple former Brydge employees said that Brydge knew there was very little chance they’d be able to fulfill the orders when they accepted them in January.

Finally, Brydge customers who are seeking repairs or replacements for products covered under warranty have also been left in the dark. The company has not publicly responded to any of those customers.

Brydge’s response

When asked for comment on this story, Brydge issued a press release in which it finally announced what’s next for the company. According to the press release, the Brydge brand and its intellectual property have been “acquired by a third party via a foreclosure process initiated by its senior lender.” As a result of this, Brydge is ceasing operations.

Contrary to comments from former employees, Brydge attributes its downfall to COVID-19 and the “recent economic conditions.” The company says:

Brydge was born out of a desire to create tablet and computer peripherals that could be design-focused, innovative and high quality. Starting with turning the iPad into a genuine laptop replacement, Brydge went on to create leading docking stations. From there Brydge grew rapidly and became a disrupter in the productivity sector, winning multiple awards.

Recently, Brydge has experienced financial challenges stemming from the delayed effects of COVID-related supply chain distributions and retail store closures coupled with higher freight costs. Combined with the recent economic conditions and the slow down in market activity, this led Brydge’s lenders to initiate a foreclosure process which has resulted in the sale of the BRYDGE brand and intellectual property.

“I am extremely proud of what the Brydge team has accomplished including the award-winning innovative solutions brought to market and setting a new benchmark for computer peripherals in quality and design,” Mander-Jones said.

“I hope the acquirer of the Brydge brand and IP can continue the legacy of innovation of the BRYDGE brand and take the products and brand to new heights,” Smith added.

“We recognize there are current outstanding items including unshipped ProDock preorders and other company matters and we are working through these items as part of this process,” Brydge concludes.

In an email to former employees on Wednesday, seen by 9to5Mac, Brydge said that it is “working on some possible paths forward to settle the outstanding amounts owed.” The company didn’t offer a timeline for this process, saying that the situation “is not completely within our control and may take longer than anticipated.”

What’s next for Brydge?

Looking back at their time at Brydge, multiple former employees said that they feel severely misled by the company. Mander-Jones and Smith routinely painted a picture of Brydge that was far more positive than reality, the people said. Some employees who joined Brydge from other successful companies said they felt like they were misled and deceived about the state of the company.

Multiple employees who initially interpreted Mander-Jones and Smith’s leadership style as passion for the company said their opinion started to sour when details of the company’s actual financial state were revealed. Almost universally, former Brydge employees said that they attribute the company’s downfall to the high turnover rate, mismanagement of growth, and the lack of transparency provided by Mander-Jones and Smith.

When asked what they thought was next for Brydge, most former employees simply laughed at the idea that anything was next for the company.

Brydge banked with Silicon Valley Bank, which crashed in March. The crash had no effect on Brydge because they had no cash in the bank to lose, the people said.

Zac Hall and Michael Potuck contributed to this report

Follow ChanceTwitterInstagram, and Mastodon

FTC: We use income earning auto affiliate links. More.



Source link

Leave a Reply

Your email address will not be published.