Amazon's entrepreneur dream is closer to a nightmare for many – Protocol


These people started small businesses with Amazon thinking they could make it big. Now they’re battling to keep going and afraid to quit.
On its face, Amazon’s DSP program appears to be a smart business proposition for everyone involved. But many owners have found themselves barely breaking even or feeling trapped.
On a Veterans Affairs job board, between advertisements for public loan forgiveness and a Red Cross blood drive, is an attractive small-business opportunity for returning soldiers. Want to finally be the boss of your own future? Amazon will offer you the chance to start your own delivery company, no experience required.
This advertisement attracted the attention of one veteran when he was getting medical care at the VA following multiple military tours. He thought the idea of becoming his own boss sounded like an appealing opportunity.
The materials touted that he could make more than $75,000 and perhaps as much as $300,000 every year. The application required that you have $10,000 in startup capital, but the ad he saw also said that the fee might be waived for veterans.
He was all in. He applied and was almost immediately accepted to start his own limited liability corporation. Just like that, he was an Amazon Delivery Service Partner.

On its face, Amazon’s DSP program appears to be a smart business proposition for everyone involved. Take the delivery model proven successful by FedEx — subcontracted logistics companies like franchises — and Amazonify it. Rather than give subcontractors a geographical territory and have them just go at it (a la FedEx), provide them with specific routes. Take the algorithmic calculus that made two-day shipping possible and set strict rules for how quickly and precisely every delivery must be made. Accept none of the liability, taxes or responsibility for worker’s comp.
And in return, each individual LLC owner gets their own ready-made, money-churning delivery business supplied with Amazon’s seemingly boundless demand.
Only for the veteran and some other DSP owners interviewed for this story, that isn’t all they got in return. After more than a year working for the company, some of these Amazon delivery contractors — including a DSP owner who has filed a lawsuit against Amazon as well as the veteran who launched his business after finishing military service — are or were dependent on federal paycheck protection program loans to maintain cash flow and have grappled with profits below or at the low end of Amazon’s advertised range (below $100,000). While some of the DSP owners interviewed for this story said they’re desperate to dissolve their companies, they told Protocol that they haven’t closed up shop because they are afraid of the tens of thousands of dollars in fees they might incur when they do.
Aside from people who run successful DSPs or have since left the DSP program, everyone who currently owns or works for a DSP was granted anonymity for this story because they are afraid Amazon will retaliate. Of the people interviewed for this story, only one of them spoke favorably of the program.
In June 2018, Amazon began advertising that almost anyone could become an entrepreneur, so long as they had $10,000 in cash. The company would take applications from individuals — not groups — who were willing to start their own LLCs. Once accepted into the program, Amazon would teach how to hire drivers, lease vans, pay taxes and get insurance. It was like a Blue Apron meal kit, but for your own small business.

The new DSP program was part of Amazon’s efforts to solve its problems with last-mile delivery. The company wanted to move faster than the two-day Prime standard, and subcontractors made delivery both cheaper and more flexible. And it worked: Less than a year after first advertising for the program in 2018, one-day delivery made its first appearance in a 2019 earnings call, the beginning of a ramp-up in delivery speed that continued until the pandemic began in March 2020. By August 2020, more than 1,300 DSP companies had launched across the U.S., Canada and Europe.
Francisco Ramos, an owner based in Denver, said he believes that Amazon’s system can make owners even more than the money advertised, and that those who fail to hit the range are simply making poor business decisions. Ramos, who feels sympathy for Amazon’s business practices, believes the company’s decision-making is oriented toward maintaining delivery speeds and pleasing the customer, sometimes regardless of the consequences for specific DSPs. For example, Ramos said that Amazon sometimes added DSPs with new, less-qualified owners just to ensure that deliveries were always fast (especially during the peak months of the coronavirus pandemic), even when there was less work available for each LLC. “Their targets, you’ve gotta be barely average to hit those targets. And if you try a little harder, those targets are a piece of cake to blow right by,” he said.
But all of the other DSP owners, managers and drivers interviewed for this story, including those making profits in the middle or higher end of Amazon’s advertised range, told Protocol they see their success as born from a combination of luck in terms of delivery location and a willingness to skirt Amazon’s rules for the program. Aside from Ramos, all of the business owners and drivers interviewed for this piece see themselves as working primarily for Amazon, not for an independent small business. That mentality has added to the disappointment for workers seeking autonomy, like the veteran interviewed for this story.

“It’s not a partnership. This is working for Amazon,” the veteran said. “We DSPs are not business owners, we’re paid managers. They control every aspect.”
Ramos had the opposite perspective. “You’ve started a business, this is on you. You have a lot of people that are playing the Amazon employee mindset. But this is on you,” he said.
Both Ramos and other DSP owners interviewed for this story agreed that when the LLCs do struggle to make a profit, those owners might not have the qualifications that would help them succeed. Amazon’s materials for the program encouraged people with very limited business experience, including veterans, to apply. While Ramos credits his financial business background for helping him make his DSP a success, many people accepted into the program have backgrounds different from his. “They have no business experience,” he said about the DSP owners who struggle to make significant profits.
Whether it’s because of the design of the program or because people are running businesses without the necessary qualifications — or a combination of the two — some of Amazon’s DSP owners are frustrated and struggling financially, leading them to view the program as a trap they can’t escape.
“As we grow, we don’t always get it right, and we are committed to seeking feedback to continue improving the DSP and driver experience. This year, we made more investments than ever before in new technology, process improvements and rate increases for the DSP program — and much of the changes we made were based on the feedback and input from partners. The majority of DSPs consistently out-pace our marketed profit expectations for the program, and this year we invested $700 million to support DSP rate increases, sign-on and retention bonuses and recruiting costs,” Amazon spokesperson Alexandra Miller said in a statement to Bloomberg in October 2021. Amazon did not respond to repeated requests for comment on this story.
The DSP program is targeted toward people who want to be small-business owners and has no explicit prerequisite qualifications (aside from the ability to prove access to $30,000 in liquid assets). After applicants are accepted as DSP owners, they are first required to establish an LLC. That LLC then hires somewhere between 20 and 40 drivers on average, leases tens and sometimes even more than 100 vans from a company contracted with Amazon, purchases Amazon-branded hats, vests and other driver clothing, and installs the Amazon app on driver phones. On a day-to-day basis, Amazon tells the LLC owners and drivers what routes they will drive, how many packages they will deliver and when to make the deliveries.

But the routes each LLC receives every day can change without explanation. If drivers fail to meet delivery timelines or otherwise violate Amazon’s expectations, the company sometimes encourages the LLC owner to discipline or even fire their driver. “There’s just no legitimate way to do anything correctly at Amazon,” said Avery Barnard, a driver who worked for two different DSP companies in the last three years. “I love delivery jobs, I’ve done them a lot, and Amazon was by far and away the worst one to ever do it for.”
Amazon then rates the delivery performance for each pay period, and the LLC is paid based on that score. Most of the LLC owners and drivers interviewed for this story said that a “Fantastic Plus” score was the only ranking that led to high enough pay for the LLC to make a profit. For some LLCs, reliably achieving that score felt almost impossible, and the reasons for the rating were sometimes inscrutable.
After the DSP owner is paid by Amazon, the owner then has to pay the drivers, taxes, leases on the vans, repairs to the vans, new clothing (the physicality of the job means some drivers go through gear every couple of weeks), worker’s comp and other costs. Though Amazon directly pays the LLC for its drivers’ regular wages, it does not always explicitly compensate them for overtime hours. For DSPs where the warehouse location is far from both the headquarters and route — this is more common in rural delivery areas — the drivers usually rack up many overtime hours driving to and from the route, and Amazon doesn’t pay for those extra hours (though it does provide bonuses for excellent delivery scores, which owners could choose to use to pay the overtime), according to some owners.

Amazon told Bloomberg in 2021 that around 90% of Amazon delivery drivers finish their routes within the time allotted.
When the routes are plentiful, drivers experienced and accidents few, the DSPs can rake in hundreds of thousands of dollars based on the financial bonuses that come with “Fantastic Plus” or higher. But if a dog bites a driver or if the driver crashes a van; if the routes mysteriously disappear in the slow season; if drivers are scarce; or if new drivers can’t hack the speed and diligence required for a good score: any of those problems could immediately wipe out most of the revenue.
“At UPS or FedEx, they don’t really care, they just want the packages delivered. At Amazon, you got to take the photo, the photo has to be Instagram-quality worthy, you got to text the consumer it’s there. It’s kind of crazy how Amazon expects the most, but pays the least,” said one manager who works for a successful, high-profit DSP thriving in a major metropolitan area. The drivers Protocol spoke to said the pay at their respective DSPs equated to at least $1 per hour less than comparable rates at FedEx and UPS, and sometimes $2 or more. One DSP driver in a metropolitan area said that he and most of his co-workers would rather drive for UPS, but the jobs are infrequently available and snapped up immediately.
Despite the fact that this manager worked for a DSP owner who managed to make significant profits, he still called the program a bad deal. “I definitely wouldn’t recommend joining the program,” he said. “The amount of money you have to put in, your profit margins are going to be razor thin, or you might even lose money.”
For some financially successful DSP owners, the difference in profit and revenue makes them wonder if the effort is worth the reward. “I grossed $3 million from Amazon,” another DSP owner told Protocol. “And somehow, after I pay for everything, I end up making less than $90,000.” And of that number, almost half of it came not from Amazon, but from federal paycheck protection program loans that most DSPs were eligible for over the last two years of the pandemic. “If I hadn’t gotten a $40,000 PPP loan, my company would have had to shut down. I didn’t have enough working capital,” he said.

This owner is not the only one to depend on PPP loans to maintain cash flow. In January 2022, a DSP owner in Durham, North Carolina, alleged in a suit against Amazon Logistics that the company knew that DSP owners had to rely on PPP loans for cash flow and that Amazon actively encouraged it.
“Instead of paying DSPs fairly, Amazon relied on the federal government’s Paycheck Protection Program (PPP) to keep DSPs operational, thereby using taxpayers’ money to pay for its operations. On information and belief, nearly all DSPs are currently operating at a loss due to Amazon’s control of the DSP program and rely on PPP funds to stay afloat. Amazon knows this because it performs an annual financial review of most DSPs’ accounting records,” attorneys for Ahaji Amos, the DSP owner, wrote in the suit.
“There have been months where I have to get loans from relatives to make payroll,” one owner said.
Owners can also lose money because of driver shortages. Depending on the location, especially in rural areas, drivers are hard to find, and finding substitutes is even harder. That means that if a driver is sick or injured, the LLC might have to drop a route. “If you don’t have enough employees to run those routes and you drop a route, they fine you daily. They take a couple hundred dollars for every route you drop, every day,” the veteran owner said. Amazon has also terminated or threatened to terminate contracts with DSPs that struggle to hire over sustained periods, regardless of the money and time invested in the LLC.
Many drivers also find the job so grueling and low-paid that they last only a few months, forcing the LLC to find new workers on a regular basis. Barnard, the driver who worked for two DSPs in the last three years, said that his one-year tenure at one DSP was the longest of more than 30 drivers. “There were people that were like 25, and they were like, ‘This is not how a workplace is supposed to go,’ and they left after a couple of weeks,” he said. “Then there are a lot of older retired guys trying to do this to make some money for vacations and such, but we were doing things like XL packaging, very heavy stuff. There are people like that who came and went, couldn’t get hired anywhere else, and frankly shouldn’t have been doing that kind of job.”

Ryan Schmutzer, the owner of a logistics company founded as a DSP near Portland, Oregon, became the public face for DSP owner resentment when he and another local owner hired a lawyer and threatened to sue Amazon in June 2021 for what they described as designing a program environment that was just too financially and physically difficult.
Schmutzer jumped on the promises of the DSP program shortly after it launched. Though his new business was initially profitable, Schmutzer told Protocol that he first realized the program wasn’t designed for his benefit as an owner when Amazon pushed the rental company to charge him more for his rental vans — not because they actually cost more, but because they wanted him to pay a flat rate that Amazon had negotiated with the rental company, not the lower one Schmutzer had negotiated for himself. DSP owners are not usually allowed to rent any van of their choosing, but instead pay a preset rate for Amazon-branded vans from a specific rental company selected by Amazon.
One of the managers for a successful, urban DSP company told Protocol that they believe city locations are inherently more profitable, because there are always packed routes in very small radii, eliminating the overtime hours that accumulate when drivers have a long distance between themselves, the warehouse and the route location.
But cities pose their own problems, too. The narrow, windy streets of Portland and Seattle’s hills were difficult for drivers to navigate in the traditional vans. Schmutzer and the other LLC owner knew other types of delivery vehicles would be more appropriate for the terrain but were not allowed to switch. And some drivers described the very high number of tightly packed stops to be very physically difficult to manage, especially on tight streets.
“Vans would get stuck,” Schmutzer said. “We were required to use this vehicle, required to put it on this route. There was no exception for it.”

The conflict over the vans revealed to him what he believes is one of the central problems with the structure of the program: It was designed to serve Amazon’s needs regardless of whether it made money for the DSP owners.
When Schmutzer publicly challenged the company last year, other DSP owners emerged from the woodwork across the country, calling him to tell their own versions of the same story. Their routes seemed to appear and disappear on random whims, making it impossible to make a real profit; some felt that Amazon’s metrics for the “Fantastic Plus” score were basically impossible to achieve in their delivery area; others said their vans had been so damaged during deliveries that the cost of returning them would wipe out any money they had made. Schmutzer even flew to an Atlanta meetup for a weekend to commiserate with other struggling owners.
The owners who have succeeded in making the most money are sometimes the ones who break the rules. “We kind of bend the rules a little bit to work in our favor, and at the same time it also works in Amazon’s favor,” one driver for a successful metropolitan-based DSP said. For example, his DSP doesn’t report damage to the vans in the Amazon app, because Amazon would ground the van until the repair was finished. Instead, they fix smaller problems themselves, meaning the vehicles can remain in use. “Let’s say a lightbulb is busted in the headlight. If we were to mark that in the app it would ground it; instead we could just replace it ourselves,” he said.
“You can hate Amazon and do great,” Barnard said. “You can make money doing this. I would say, just be careful. Don’t let the stars shine in your eyes too much.”
The veteran DSP owner interviewed for this story wants to close out his business and leave the program, but he is afraid of what might happen if he does.
“They make it extremely difficult for you to get out of the program. If I were to say, ‘Hey, I can’t do this anymore.’ They write down every nick or scratch on a vehicle; the average person that tries to return the vehicle, you’re looking at well over $100,000 of damages they are going to find in your fleet,” he said. “That’s what you’re going to have to pay or we’re going to sue you. I can’t even get out.”

Amos, the woman suing Amazon Logistics in North Carolina, alleged the same in her complaint, claiming that she believes the company designed the program so that DSPs couldn’t afford to leave unless Amazon forced them out. “Amazon, through Element [the van rental company], charges $6,000 on average per Amazon-branded vehicle upon termination of DSP contracts. As such, many DSPs are left with over $120,000 in ‘exit fees,’” her attorneys wrote.
Barnard has heard the same from the DSP owners who employed him. “If you want to quit, you now own a bunch of real shitty vans that got beat to fuck, now you have this huge sunken cost,” Barnard said.
“I feel like something needs to be done about this. It’s a sham,” the veteran said. “What they’ve done is taken two years away from my life, causing me to miss out on job opportunities and things I could have been doing.”
How tech is tackling climate change — and reckoning with its own impact on the planet.

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Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
The metal is a core part of electric vehicle batteries.
People are seeking out EVs right as supply chain issues tracing back to the price of battery metals will make that demand increasingly hard to meet.
Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol, covering breaking news. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.
Nickel prices have been on a hell of a ride recently. The price of nickel saw an unprecedented surge earlier this month, doubling in price to $100,000 per ton on March 8. It has since swung wildly downward to $31,380 per ton as of Monday. The big initial spike was most immediately due to the impact of sanctions placed on Russia for its invasion of Ukraine, but there’s more to it; resources like nickel and lithium have been squeezed for almost a decade, and analysts have been waiting for the impending shortage to catch up with the rush to build out renewables and other clean energy technologies like electric vehicles.
Sure enough, supply chain watchers quickly looked toward green tech like electric vehicles as news of the short squeeze circulated across Twitter. “The price of nickel is going hyperbolic in a short squeeze for the ages today,” tweeted Ryan Petersen, CEO of global logistics platform Flexport. “Reminder that nickel is a key input for electric vehicle batteries.”

Oil and gas prices have also surged in tandem, as anyone who’s been to the gas pump recently knows. (Big Oil has also been raking in record profits due to commodity price swings.) This is creating a complex problem: People are seeking out EVs right as supply chain issues tracing back to the price of battery metals will make that demand increasingly hard to meet.
“We’ve woken up, for the first time in a couple of decades, to the geopolitical reality that things are impacted by commodities production,” said Jonathan Crowder, founding partner of renewables-focused investment firm Intelis Capital. “But the impact is slightly different because rising gas prices have the immediate impact that’s being felt at the pump today.”
Robert Mullin, general partner at the natural resources investment advisory firm Marathon Resource Advisors, sees something similar. He’s been bracing for the cost and supply shortage of battery metal mining to catch up with EVs since long before the Russian invasion of Ukraine. In fact, he predicted in a January 2021 report that, after nearly half a century of natural resources declining in value, prices are set for a rebound, due in part to supply chain constraints.
“We were naturally set up to have crises in all of these metals, materials and oil over the next two to four years anyway. Ukraine just brought it all forward,” he said.
But consumers are more likely to pay attention to the price of EVs, not intricate issues in the battery metals supply chain, said Crowder. A Morgan Stanley report released earlier this month pointed out that the surge in battery metals could increase the price of EV production by about $1,000 a car — something Crowder said is fairly marginal for now, but could make it harder for some would-be EV buyers to take the plunge.
The wild price swings can be seen in the ups and downs of Rivian’s fortunes recently. The company initially said it would raise preorder prices on two of its vehicles because of supply chain constraints and inflation. Then it walked that decision back after social media uproar, and a shareholder is suing. Tesla, too, announced 5% to 10% price hikes across all of its vehicles last week.

To adapt, Mullin said that EV companies should vertically integrate their natural resource mining supply chain. Tesla, for example, has created some buffer to price fluctuations and supply constraints by signing a deal with Minnesota-based Talon Metals Corp., which mines nickel.
But batteries aren’t only made of nickel — they include other metals, like cobalt and lithium, too. Vertically integrating all those types of mining could prove challenging for companies trying to produce the EVs we need to both get off oil and stave off the climate crisis.
Though batteries made with nickel can’t just be swapped out for other types of batteries into the same cars, several companies are working on creating battery packs that use different types of metals that could be used in new EVs. Zinc-air and sodium-ion varieties are widely considered the most promising.
Vertical integration could come with another challenge as well, particularly as companies set stringent climate and ESG goals. Mining can be environmentally destructive and the industry is rife with human rights abuses. By vertically integrating mining operations, Mullin said EV companies might find it harder to meet their ESG goals.
Yet solving these issues and making the mining industry a more just one is essential going forward. The Russian war on Ukraine and the volatility in the oil market show the need to kick fossil fuels to the curb, a move that would also weaken petrostates. But the climate crisis also demands we wind down carbon pollution or suffer a vastly degraded future. The Intergovernmental Panel on Climate Change found in a 2018 report that the world needs to increase renewable energy production up to a staggering 470% by 2030, all while oil, gas and coal use fall. The current wild swings in the nickel market show the need for policies and government support to keep EV and renewable tech prices low enough to spur even more widespread adoption.

Crowder, for his part, isn’t too worried. These supply chain issues, too, shall pass. “We have to look at the overall arc of battery pack prices over the last 10 years, which have fallen massively,” Crowder said. “I’m hesitant to call this the apocalypse for electric vehicles.”
Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol, covering breaking news. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.
Clari’s leaders and partners addressing the biggest questions in tech
Clari’s Revenue Operations Platform improves efficiency, predictability, and
growth across the entire revenue process. Clari gives revenue teams total
visibility into their business, to drive process rigor, spot risk and
opportunity in the pipeline, increase forecast accuracy, and drive overall
efficiency. Thousands of sales, marketing, and customer success teams at
leading companies, including Okta, Adobe, Workday, Zoom, and Finastra, use
Clari’s execution insights to make their revenue process more connected,
efficient, and predictable. Visit us at clari.com and follow us @clari on
LinkedIn.

Pilar Schenk is the Chief Operating Officer of
Cisco Collaboration responsible for growing
the organization at a global level.

“To win more revenue for your sales teams, start with the customer. Understand what your customers need, and make sure that those needs are aligned to clearly defined internal success criteria. Build trust across the teams that what you sold the customer is what is being delivered.”

Watch the full episode here.




Madalina Paul is the Regional Vice President of Major Accounts at Docusign.

“Finding transformational talent is not easy; and by extension, you should be purposeful in your strategy to retain exceptional individuals. Giving everyone the right environment to develop, grow, and learn will continuously increase revenue performance across the whole team and maximize the impact that your talent has on the organization.”

Watch the full episode here.




Michael Megerian is the Chief Revenue Officer of Yello, with over 21 years of experience building and managing SaaS revenue organizations, at Oracle, Taleo, and Ariba.

“Trying to make every deal as big as possible often adds complexity and extends sales cycles. To accelerate growth, sellers should focus on landing faster, and then expanding, and expanding again. Getting customers into your solution sooner helps you solve their initial problems, then later, you can grow together.”



Watch the full episode here.




Dan O’Connell serves as the Chief Strategy Officer and is also a member of the Board of Directors at Dialpad.

“Make it easy for prospects to go through the buying process. At every step of the journey from lead to customer, make sure they are getting as much sales assistance as they need. Focusing on the conversion rates from lead to opportunity to customer lets you spot friction and accelerate deals faster.”

Watch the full episode here.




Bhaskar Roy is the Chief Marketing Officer of Workato. He brings more than 20 years of experience in building and bringing software products to market.

“Bring sales into the marketing planning sessions. The goal of marketing is to help drive pipeline to sellers that turn into revenue. Cross-functional input from sales, marketing, customer success, channels, and anyone else involved in the process drives full alignment.”

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Mark Ebert is the Senior Vice President of Sales at 6Sense, where he leads all sales, revenue operations, and enablement teams.

“If you want to improve your sellers’ performance, protect their time. Make it clear what high-value activities actually matter and manage against only those. Don’t waste energy reporting on activities for the sake of reporting activities.”

Watch the full episode here.






Andrew Casey is the Chief Financial Officer of WalkMe. He brings over 20 years of financial experience with companies like ServiceNow, HP, and Symantec to managing financial operations.

“When heading toward IPO, align rep metrics with company growth metrics. Knowing the activities that drive predictable revenue at the rep level means you can promote and reproduce those behaviors across your entire organization.”

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Clari’s Revenue Operations Platform improves efficiency, predictability, and
growth across the entire revenue process. Clari gives revenue teams total
visibility into their business, to drive process rigor, spot risk and
opportunity in the pipeline, increase forecast accuracy, and drive overall
efficiency. Thousands of sales, marketing, and customer success teams at
leading companies, including Okta, Adobe, Workday, Zoom, and Finastra, use
Clari’s execution insights to make their revenue process more connected,
efficient, and predictable. Visit us at clari.com and follow us @clari on
LinkedIn.
The company is hiring people with smart-TV experience for a new “Home Theater OS.”
To date, Sonos has built apps to control its speakers for mobile devices and desktop PCs but not TVs.
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety’s first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
Sonos appears to be getting ready to play a bigger role on the TV: The company is hiring multiple staffers for a new “Home Theater OS” project, with job descriptions hinting at plans to run apps or experiences directly on the TV. This comes after the company considered various ways to play a bigger role in TV streaming in recent years, according to multiple sources who spoke to Protocol on the condition of anonymity.

A Sonos spokesperson declined to comment.
The company recently started searching for a “UX Lead — Next Generation Home Theater Experience,” who will work “across device surfaces (mobile, television, tablet, and HW remote) to deliver a next generation content delivery experience.” Applicants need to have multiple years of experience designing for mobile “and/or TV.”
To date, Sonos has built apps to control its speakers for mobile devices and desktop PCs but not TVs. The company’s existing home theater products also don’t ship with a hardware remote and can instead be controlled with third-party TV remotes.

Another job listing is for a future “Principal Platform Product Manager” to develop an “OS & Media Platform roadmap”; the listing asks for applicants to have experience with modern operating systems, including Android/Android TV. And a “Head of Partnerships, Home Theatre” will “play a pivotal role in connecting users to the content and services they love with Sonos quality experiences they’ve come to expect,” according to another recent listing.
That listing was promoted on LinkedIn by Sonos Chief Innovation Officer Nick Millington, who said he was working on “a new home theater project.” Millington noted that the gig would be a great match for people with experience with streaming media, including “audio, video, games, sports, music, news, movies, TV, news, podcasts.”
Sonos released its first soundbar nearly a decade ago and has seen revenue from home theater projects grow significantly as people embraced streaming video services. In its fiscal Q4 of 2019, the company’s soundbar revenue nearly matched its smart speaker revenue (Sonos stopped breaking out home theater products in its earnings reports in subsequent quarters).
Sonos has been exploring a variety of ways to further capitalize on the growth of streaming, according to multiple sources with knowledge of these discussions. One approach, which was floated internally several years ago, was to partner with smart-TV manufacturers to equip their TV sets with Sonos speakers, similar to the way the company has been partnering with car-makers like Audi.
Another idea under consideration involved turning the company’s soundbars into full-fledged media players capable of running smart-TV apps. Roku, JBL and other companies have developed similar products in the past, with mixed success.
It’s unclear whether the current “Home Theater OS” plans are related to either of those ideas. Technically, it would be possible for the company to take other avenues, including running its own apps on third-party smart TVs, to achieve similar goals.
Whatever the ultimate product may look like, the new job listings make it clear that Sonos wants to play an even bigger role in the living room and shift its business model to benefit from the recurring revenue streams of the streaming media market. The “Head of Partnerships” is supposed to help the company develop a “a platform monetization strategy,” among other things. Applicants are supposed to have a “background in digital media and/or media/application distribution platforms & technologies” as well as “working knowledge of platform monetization technologies (AdTech, billing, audience measurement, etc.).”

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety’s first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
In a world where employees can double their salaries by jumping ship, does it make sense to ding candidates for frequent job-hopping?
As the talent market has grown more competitive, recruiters have had to become open-minded about shorter stints.
In the last two months, Scott Moss has watched his mentee change between three jobs. Each time, the engineer — who only has two years’ experience — has nearly doubled her salary, said Moss, a principal at Initialized Capital.
“She was so nervous that they were going to call her out for leaving a job within a month,” said Moss. “But no, they were really excited to have her, and they offered her the moon.” (For the record, Moss said, he wasn’t encouraging his mentee to job-hop.)
A decade ago, job-hopping every two or three years — even in tech — could land a resume in the recycling bin. But as the talent market has grown more competitive, recruiters have had to become open-minded about shorter stints.
“There are many candidates who have nine months or six months [in a job] — it’s really tough,” said Whitnie Narcisse, a senior vice president at First Round Capital. “If they have a story behind it, it’s hard to just say ‘OK, if you have X number of skips, then we just skip over your resume.’”

Narcisse, who herself has stayed at First Round for seven years, still sees two years as a good minimum, particularly for executives. With so many competitive offers on the market, it’s rare to find individual contributors who stay very long, she said.
This dynamic can put recruiters in a bind: Especially when it comes to leaders, companies want candidates who will stay long enough to make an impact.
“Multiple short stints — meaning less than two years, in particular — time after time, to me, indicates poor judgment,” said Katie Hughes, the head of Executive Talent at General Catalyst.
Job-hopping isn’t new to tech: Average tenure has been dwindling for years, and that trend has only accelerated since the late 2010s, said Matt Birnbaum, talent partner at Pear VC.
“I’m not sure that it’s that much more significant of a phenomenon than it was five years ago,” said Birnbaum. “I think it’s more that there’s been a lot of movement of people post-pandemic.”
Tech companies and venture firms are feeling that movement. General Catalyst has seen “an uptick” in turnover among its portfolio companies and is trying to keep attrition rates below 15%, Hughes said.
This isn’t a surprise, given all the incentive that job-hoppers have to leave. Average pay is climbing so quickly that compensation data becomes outdated every few months, Narcisse said. Employees are getting offers for 30% more, or double what they would have made three years ago — sometimes even double what they’re making now.
Kat Steinmetz, a principal at Initialized who advises portfolio companies on talent and culture, warned against jumping too quickly in pursuit of more pay. Candidates should vet opportunities for whether they’re truly a good fit before hopping.
“I don’t think that really pans out very well for people in the long run,” Steinmetz said. “Usually, someone will do that once and then realize that it’s not a very good reason to hop, because you need to be looking for other things too.”

When Steinmetz led the Talent Success team at Box, Facebook wooed one of her employees with a “ridiculous” salary, but the woman ended up leaving Facebook after four months upon realizing it wasn’t a good fit, Steinmetz said.
“It was totally not the right job, because she got hired in, like, four days,” Steinmetz said. “They didn’t do their due diligence. She didn’t do her due diligence.”
Career stage plays into some of this job-hopping. Executives will do more harm to an organization by leaving quickly, and Hughes believes it takes two years for leaders to even start making an impact. Leaning in and working on interesting problems at a second-rate company is better than spending two years each at three of the best companies, she said.
“Like, what are you learning?” Hughes asked. “I’m happy to support people in finding the type of work and the type of company that supports their personal and professional goals, but I think that’s different than someone who is chronically optimizing for a sexier brand or 30% more on their paycheck, versus leaning in and really doing the work.”
Young engineers — such as Moss’ mentee — might be particularly incentivized to job-hop. They have less to lose by jumping ship, and even inexperienced engineers are a hot commodity now. “Two years is the new five years,” Moss said.
“Anyone with five years’ experience is either rich off crypto, working at a Netflix-like company or they’re starting a company,” Moss said. “You have to look at the two-years now, the three-years, the people who are just hungry.”
In such a competitive market, heads of Talent are willing to ask candidates for context about their frequent job-hopping. The pandemic in particular shook up the workforce, and some professionals changed jobs or took a sabbatical for all kinds of reasons.
“COVID is weird, right? People had to do a lot of weird things,” Steinmetz said. “You have to ask more questions right now to get a better sense of what has really happened for somebody.”

Whether pre-pandemic or post-pandemic, a candidate may have been caught up in a big layoff or a company having issues. Longer stints before and after can help cushion these exceptions, Narcisse said.
Birnbaum experienced this firsthand eight years ago. In 2013, he spent four months as the head of Talent Acquisition at the ill-fated mobile payment startup Clinkle before leaving because, he said, “At the end of the day, it just wasn’t a company.”
“There are a lot of times where people stay for a shorter period of time because what they understood or what they walked into wasn’t necessarily what they expected,” Birnbaum said. “I’m always on the side of giving people the benefit of the doubt in these scenarios and asking for a bit more context.”
As with Clinkle, tech startups can rise and fall quickly. Companies can change at warp speed, and jobs can also turn out to be a bad cultural fit. For candidates, it can be hard to know what you’re signing up for when judging from an interview process where “everyone’s on their best behavior,” Hughes said.
But short of those rare, untenable situations, Hughes looks for candidates who are “really digging in” once they’re at an organization.
“There’s an element of stick-with-it-ness that’s required in order to really maximize your learnings and your own development,” Hughes said. “If you’re not getting into that deeper level of work and that deeper level of contribution to the organization, I feel like you’re just not developing at the same rate as someone who is.”
Charging a car battery might take an hour … but swapping it out takes minutes.
Battery swapping has never become a mainstream charging method. But it’s starting to gain traction in China.
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
The pitch for battery-swap stations is simple: It can take more than an hour to fully charge common electric vehicles, but swapping in a new battery only takes five minutes.
Yet battery-swapping has never become a mainstream charging method, even as EV adoption has grown significantly over the past decade. Israeli startup Better Place first popularized the idea globally in 2007, and it went bankrupt in 2013. Tesla flirted with the idea the same year Better Place went bankrupt before soon abandoning it for Supercharger stations.
But the idea has taken off in China recently, thanks to a few prominent EV companies’ investments. Companies such as Nio and Aulton New Energy have built 1,400 battery-swap stations nationwide and plan to grow the number to 26,000 by 2025. They hope battery-swap tech can give them an edge in the increasingly fierce domestic competition for EV supremacy. The technological revival is also partly motivated by policy incentives, as the Chinese government started to offer subsidies specific to battery-swap EV models.

Riding on the rapid growth of China’s EV industry, what were once fringe, costly ideas have come back to life. And as they grow, some Chinese companies are also thinking of taking the battery-swap solution global.
As of February, there were more than 1,400 battery-swap stations in China, more than double the number a year ago. Beijing, with 265 stations, has the highest concentration of swapping stations. Most of the existing stations are operated by two companies: Nio, the breakout domestic EV startup, and Aulton New Energy, whose founder first started stepping into the battery-swap field in 2001.
But as the industry starts to attract more market interest, formidable competitors are jumping into the race. In April 2021, Sinopec Group, China’s state-owned petroleum giant and the world’s fifth-most profitable company, announced it planned to build 5,000 battery-swap stations. In January, Contemporary Amperex Technology (CATL), a Chinese company that manufactures one-third of all EV batteries in the world, launched a modular battery-swap service in 10 Chinese cities. Collectively, all of these Chinese companies have pledged to build as many as 26,000 stations by 2025, according to a report by Bloomberg.
Nio, which has been building these stations since 2018, is betting this new charging technology will eclipse other domestic EV brands or even the industry leader Tesla. “As a startup, it needs [brand] differentiation, and it has chosen battery swap as the difference,” said Xing Lei, an auto industry analyst and former chief editor at the Beijing-based China Auto Review. “What battery swap means to Nio is what Supercharger means to Tesla.”
NIO Power Swap Station from NIO on Vimeo.
These battery-swap stations look like sleek boxes you can pull a car into. Each station takes up the space of about three parking spaces and hosts five to 13 batteries. They are usually placed in gas stations or public parking lots. The company has even coined a term, 电区房, meaning properties within a two-mile radius of a Nio battery-swap station, referencing 学区房, the popular tendency of buying property close to a good public school.

While having a fully charged battery in five minutes sounds great, the reality is more complicated. Waiting in line (because a station can only charge one vehicle at a time) and waiting for a full battery (if all the ones in the station are charging) can extend the total time at the station, making it not quite as efficient as popping into a gas station.
Over the years, Nio has developed the idea into a sophisticated system named “battery-as-a-service.” Today, its customers can buy a Nio model without a battery at nearly 70% of the regular price. Instead, by paying about $230 per month, the car owner can swap in a new, rented battery six times a month. While the program does significantly reduce the initial purchase price, it’s hard to calculate whether owning a battery would be less expensive in the long run. Pair that up with the fact car owners may plan to sell their car in a few years, and it becomes a math problem not everyone can solve.
The profitability is a math problem for EV companies, too, as constructing one station can cost between $230,000 and $630,000, according to Chinese website Sohu. And the batteries — now assets of the company instead of the customers — are often not used enough to warrant the depreciation. That makes battery swapping an ambitious, cash-burning bet for now.
Still, reducing the barriers to entry for people to buy EVs will be absolutely vital for getting them adopted more widely. The International Energy Agency reported that EV sales doubled last year compared to 2020, but they still account for just 9% of all vehicle sales worldwide. Speeding up EV adoption is absolutely vital to the world meeting its climate goals, though. Transportation emissions account for roughly 15% of all carbon pollution globally and the world needs to get a grip on that chunk of emissions through EVs and other means.
Conditions in China are in many ways more favorable than in the U.S. for battery-swap tech. The high urban population density in China means many people live in high-rise apartments and need to compete for the limited supply of EV chargers near their homes. If access to charging can’t be guaranteed, then swapping batteries is a useful alternative.

But like all rising industries in China, battery swapping also has the government standing behind it. In April 2020, China’s central government decided that, while direct subsidies for EVs were being phased out, models that support battery swap will remain eligible for subsidies for a longer period “to encourage the development of new business models.” In July 2020, a high-level official at China’s Ministry of Industry and Information Technology summarized six advantages of battery swapping, from lowering costs to improving battery charging safety, an important endorsement of the technology.
The EV charging landscape in China is still the Wild West. Even outside of the debate about whether traditional charging and battery swapping is the future, there is still disagreement about how to create a battery-swap system within the industry itself as different companies pull in different directions instead of a unified one.
As rapidly as battery swapping might grow in China, few people expect it to replace traditional charging as the dominant EV solution. Currently, there are more than 1.2 million public charging stations in China, 1,000 times more than battery-swap stations. Charging stations are cheaper, asset-light and more flexible.
Teld New Energy, China’s largest charging station company, has been openly opposed to the battery-swapping business. “The battery-swap model will only serve as a supplement to the charging station model, so battery swap won’t substantially impact Teld,” the company told investors in an earnings call.
The battery-swap players also have different visions for the industry. Nio’s stations can only be used by its own vehicles, which only represent around 2% of all EVs in China. CATL says its modular battery is compatible with 80% of global platform-based vehicle models, but ultimately it’s the EV companies’ decision to take up the offer or not. Aulton’s stations are more designed for fleets of electric taxis and buses, which have a consistent need for fast charging, but the enterprise nature of the company makes it less known to the public.

The lack of a unified vision — and with it, the lack of interchangeable EV batteries — is one of the biggest problems facing the industry now. It’s what prevents battery-swap stations from becoming the gas station of a new era. “You wouldn’t want a gasoline station which was a GM gasoline station, and another one that was a Ford gasoline station. That would be really annoying for the customer,” Henrik Fisker, founder of American EV company Fisker Inc., said on a podcast.
Last November, China’s national standards-making body released a charging safety standard, the first for the battery-swap field. It only determined the minimum number of times a battery can be safely swapped in its lifetime, but even that minor regulation could be the first step for different EV companies to coordinate their designs in the future.
While most Chinese companies are still looking inward for the future of battery swap, Nio is taking it overseas. In its plan to build 4,000 battery-swap stations by 2025, 1,000 will be outside China. In January, it launched its first overseas battery swap station in Norway, the country that has become the harbinger of Nio’s international strategy. Nio has also reportedly been eyeballing a U.S. expansion, which could be an interesting test to see whether the technology abandoned by Tesla can make it stateside.
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
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