Bonobos’ SF Engineers Split Between NY Relocation And New Company Led By CTO Mike Hart

Bonobos‘ newly hired San Francisco engineering team is fracturing, but there’s no disaster. Bonobos CTO Mike Hart has departed the company to become a co-founder, along with Cory Hicks, of a brand-new business.

After cooking up some hot new personalization technology at Bonobos, Hart and five other engineers from the team will be spinning out that technology into a standalone company separate from Bonobos.

Meanwhile, half of the remaining engineers at Bonobos will be relocating to New York, while the other six have left the company. To be clear, everyone in Palo Alto was offered a relocation package, but some chose New York, while others chose to stay and work on the Hart/Hicks venture, and the rest decided to leave. There were zero layoffs.

Here’s the story:

Cross-Coastal Dilemma

In late January, Bonobos CEO and founder Andy Dunn began to realize that the bi-coastal situation wasn’t working out — the Bonobos brand and retail teams worked out of New York, while the engineering arm remained in Silicon Valley. Not only was traveling back and forth all the time financially taxing on the company, but it was also physically exhausting.

“It was a different world in 2011, when we were looking to build out our engineering team,” said Andy. “We got the impression that NY was light on engineering talent.” For that reason, Bonobos built out an engineering office in Palo Alto and staffed it with 18 amazing engineers, including Hart and Hicks from Netflix.

But after seeing the cross-coastal offices play out, Andy soon realized that Bonobos required co-located employees, and decided to relocate the Palo Alto engineers to New York.

As Andy worked through this dilemma, Hart was also coming to a realization. He and his PA team were working on a new personalization product for Bonobos based on his years of experience at Netflix handling the same type of curation issues.

The Split

After a little A/B testing on the site using the new personalization tech, Bonobos saw a “really strong revenue lift,” according to Dunn. Within a few weeks, a decision had been made: Hart would stay in Palo Alto with a handful of developers from Bonobos who were truly passionate about this new venture, and Dunn would try to persuade the remaining engineers to head out to NY.

According to Dunn, the relocation package was a “meaningful one,” including a few five-figure checks. However, not everyone wants to pick up their life and move to New York, especially once they’re entrenched in the Valley, so the 18 developers in Bonobos Palo Alto office split three ways.

Six, including Hart and Hicks, will be working on the mysterious personalization product. Six product team members will come to New York, and the remaining six are no longer with the company.

But that’s not to say that Bonobos is reducing its engineering efforts — the opposite, in fact. The company plans to have 20 full-stack engineers on the team by the end of this year, and from there grow the engineering team to 30 over the course of the next two years.

Bonobos has also promoted Jon Czaja from VP of Operations to Chief Operating Officer. He was formerly Director of Supply Chain Operations at Walmart, and is the first COO at Bonobos.

“We just raised a $30 million round, with which we will become fully profitable,” said Dunn. “We want to make this shift at a time when we’re financially healthy and ready.”

The Hart/Hicks Venture

As for this new personalization product, Mike is keeping pretty mum about the whole thing. So far very little is known about the new company. According to Hart, this product is actually in A/B testing on Bonobos right now, though you’d be hard-pressed to notice it. It works a lot like personalization on Netflix, but “far more subtly,” says Hart.

The team is currently focused on product development, but Hart mentioned that he’ll probably start looking to raise very soon, and Dunn said that Bonobos would love to be a shareholder, considering the project is Bonobos-bred technology. Hart confirmed that Bonobos will most likely be a participant in upcoming funding rounds, and that Bonobos will probably be the first real customer on the platform if all goes as planned.

The Hart/Hicks Venture will be a platform-as-a-service company, handling the personalization algorithms for its clients.

The product is quite a ways away from a launch — the Hart/Hicks venture (as I like to call it) doesn’t even have an official name yet — but you should certainly expect to hear more out of Hart and Bonobos in the future.

Additional reporting by Josh Constine and John Biggs