So Your Startup Died. What Do You Do With All That Swag?

The decision has carried its own emotional toll, in part because of how all-consuming work can be for a startup employee. In Silicon Valley and its offshoots, a shirt from the startup with the most admired founders or biggest fundraising round has cachet. “Startup T-shirt culture is definitely startup culture,” said Lizelle van Vuuren, an entrepreneur who runs the networking group Women Who Startup.

Zenefits was one of Silicon Valley’s hottest startups when Eric Kingsbury joined in 2014 to help clients set up the company’s insurance software. The San Francisco–based firm raised money at a $4.5 billion valuation. It gave out tees, stress balls and skimpy tank tops that said “Friends With Zenefits” for employees hired through referrals.

By 2016, regulators were swarming over the company as it ran afoul of state licensing rules. With its CEO forced out, the company slashed hundreds of jobs. Employees felt bitter. Kingsbury took a knife and cut out part of the Zenefits logo from his water bottle so it just read “Zen.” Others donated their logoed clothing to Goodwill and homeless shelters. Kingsbury saw a man he believed to be unhoused wearing a Zenefits shirt in San Francisco’s Pacific Heights neighborhood.

Kingsbury said he no longer sees anyone wearing Zenefits gear. The remaining pieces of the company were recently sold to a private equity firm. He wonders what happened to a co-worker who got a Zenefits tattoo. “When the company is doing well, being covered in TechCrunch, people flock to it. All you want is to be carrying that stuff to show that you’re in the in crowd,” he said. “As soon as it dies, it’s like, ‘Get it away from me. It burns.’”

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T-shirts and sweatshirts emblazoned with company logos are part of the broader corporate phenomenon of internal branding, which researchers have been studying for the last two decades, said Monika Müller, an associate professor of organizational studies at Lund University in Sweden.

Companies have used tools of internal branding—touting company values, throwing lavish employee social gatherings, and handing out logoed gear—as a form of “normative control,” Müller wrote in a 2016 study of furniture seller Ikea. The branding helps employers motivate workers to work harder, she said. “The best way is to control their mind, make them on brand, and make them really proud, to work on their self-esteem that they’re part of something big,” she said.

The phenomenon has become a big business for e-commerce firms like Swag.com, owned by Custom Ink, and SwagUp, which sells custom boxes of items such as tote bags, notebooks and T-shirts for employees at companies including Duolingo, Facebook and Square. Michael Martocci, the Miami-based founder and CEO of SwagUp, said his firm pulled in over $50 million in sales last year, mostly from software companies. The average customer spends about $25,000 on swag annually. “Larger companies are spending in the millions,” he said.

Martocci said his clients are continuing to spend, but he is bracing for a slowdown in orders. “There are layoffs happening and different things,” he said. “There’s going to be hesitancy from companies to spend money until the market shakes out.”

Maybe that’s a good thing. Some in the tech industry see the rampant handouts of swag as wasteful. Jonathan Mildenhall, Airbnb’s former chief marketing officer who later co-founded marketing agency TwentyFirstCenturyBrand, said tech firms need to be more deliberate about their swag. “T-shirts are great, you get real branded utility at a reasonable cost, especially when made out of recycled fabric,” he wrote in an email. “But tote bags, plastic crap, laptop cases, windbreakers, etc. no one really values them, they add nothing, just mindless herd mentality which is environmentally damaging.”

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For a certain crop of doomed startups or products, swag has become a collector’s item. A fleece pullover with a Theranos logo, advertised as having been “given to employees,” was recently up for sale on eBay for $499. A CNN+ sweater was on sale for $40. A former employee from failed short-form–video app Quibi said he kept his swag vacuum sealed in the hope that it will increase in value. One collector told NPR she grabbed a shirt from Fast on eBay for $25. (Collectors also have to be wary of nonauthentic swag that employees never actually owned.)

The potential for historical significance and nostalgia is part of what has motivated Lucy Arnold to save tees and tote bags from two startups where she worked that went under, co-living startup HubHaus and eco-friendly grocery-delivery startup Zero Grocery. She thinks people may talk about the 2010s San Francisco startup scene the same way they talk about 1920s Paris someday. “These unrecognizable branded T-shirts and tote bags,” she wondered, “will they be historically significant at some point?”

Austin Caldwell, a veteran of several startups, has asked himself a similar question. In 2015, he spent his first summer in San Francisco interning for viral messaging app Yo, which allowed users to send messages to others with a single word: “yo.” By the middle of the summer, growth had stalled, draining the energy out of the hip South of Market office with its exposed brick walls and pingpong-slash-conference table. The company let him go early from his internship to save money, presaging the startup’s collapse a year later.

But Caldwell at least has one memento from those days: a keychain displaying the company’s purple-square logo with the word “Yo” on it. He sometimes gets a reaction from people at bars. “It’s like an ancient artifact,” he said.

Auringer, the former Katerra employee, still keeps a Katerra-branded water bottle on her desk at her next job. “It’s a reminder that this happened and it was real,” she said.