Berlin/Tel Aviv, July 27, 2020. Earlier today, Zeitgold Founders Stefan Jeschonnek, Dr. Jan Deepen, and Kobi Eldar met with all Zeitgold employees to share the following message:
Over the last few weeks, we took a very honest and thorough look at how our current Zeitgold product is performing, also in response to what the market is demanding. We have shared our findings with you last week and ultimately, as founders and management team of Zeitgold, now came to the hard but inevitable conclusion that we don’t see a viable future for our current main product. This is an incredibly difficult reality to face, knowing how much energy and dedication all of us have invested over the past five years. We are extremely proud and grateful for what all of you have done to serve our customers and embody our mission to enable people to do what they love. That makes it even harder to share the following news with all of you.
Today, we announce that we will sunset the existing Zeitgold product and therefore will discontinue the majority of our operations in Berlin and Tel Aviv from September onwards. We will have to say goodbye to about 75 of our team members and will rebuild Zeitgold with a small team of about 30 people. We will focus on pure software products that are building on the strengths, assets, and IP we have built over the past years. We have started developing these products over the past year and will now shift our focus fully.
What this means for team members who will be leaving us
To those of you who will be leaving us, we are very thankful for all you have done for Zeitgold, for our customers, and for each other. The decision to eliminate your positions was one of the toughest decisions we have ever made and in no way reflects on your performance or your contributions. It is now our highest priority to do the best we can to treat you with compassion as well as financial and career support.
Everyone who is affected by our decision will receive a severance package that is based on years of service. In addition, we will provide you with career transition support in the form of resume reviews, interview training, and reference letters. We will also make our personal and professional networks available to help you with your job search wherever we can.
What this means for all of our customers
Sunsetting Zeitgold’s current main product and services will also be hard for our customers and we owe it to them to support them in transitioning to another tool or process. Our current customers can continue using their existing Zeitgold solution until mid-September to complete their bookkeeping for the months of June, July, and August. Through September we will be supporting all of our customers, both small businesses and tax advisors, in transitioning to alternative solutions. Zeitgold will not be charging any customer from the month of July onwards; any payments already made for these months will be refunded.
How we arrived at this decision
From the early days of Zeitgold, we knew that automating accounting for small businesses and their tax advisors is a complex problem to solve. With the help of all of you, we have gotten very far and have built a hybrid of machine learning algorithms and carefully inserted human expertise. We have seen tremendous progress over the last years in how much we can automate repetitive tasks in accounting. But we also have to admit that given the complex and sensitive nature of financial data, we haven’t managed to deliver our software product without continued sizable investment in manual labor. This ongoing investment makes it difficult to scale our product and to deliver it at a cost that is economically sustainable.
This is an even bigger challenge given that all of our market-facing efforts have demonstrated limited willingness to pay for accounting software and efficiency gains in accounting preparation. And while the Corona crisis has increased the need and desire for small businesses and accountants to work in a digital way, the current economic climate doesn’t support our product offering and business model at large. Our growth efforts in the past months have hence not been able to deliver enough traction to continue operating our current main product.
Ultimately, this has required us to make the hard but necessary decision to not continue on the main path we are currently on.
How we will operate going forward
We started this company five years ago because we want to make it possible for anyone to successfully run a small business. As founders, we still fundamentally stand behind our founding vision. Together with a smaller team, we will now take a step back and re-envision how great software can empower small business owners in running their business with confidence and success. In order to do that, we will leverage the technology assets we have built and the comprehensive market and customer understanding we have developed. We are grateful that our investors, who have invested in our Series B financing round recently, are fully supporting us in our decision.
A first effort in the new direction is Sorted, which started out as an experiment a year ago and has gained significant initial traction since. Sorted allows freelancers to prepare all of their taxes with the help of highly intuitive software and connects them with tax advisors on-demand. While Sorted currently only supports freelancers in Germany, we are working hard on expanding the types of customers we can serve with this offering. Other product lines are currently in development and will follow in due course.
A few personal words
While making these changes is tough for all of us, we firmly believe they are the right ones at this point in time. You all know how much transparency and radical candor are core to our culture. We will continue to be open and transparent with all of you over the coming months as we are transitioning Zeitgold into a new phase. This is a time where we want to and need to be there for each other. It is our commitment that we will support all of you, staying or leaving Zeitgold, to the best of our abilities.
Stefan, Jan & Kobi