Preheat your oven to 425°F (220°C).
Wash the baby potatoes and place them in a large pot. Cover with water and add a generous pinch of salt. Bring to a boil and cook for about 15-20 minutes, or until the potatoes are fork-tender.
Drain the potatoes and let them cool slightly.
On a baking sheet lined with parchment paper, arrange the potatoes in a single layer. Using a fork or the bottom of a glass, gently smash each potato until flattened but still intact.
In a small bowl, mix together the olive oil, garlic powder, onion powder, smoked paprika, salt, and pepper. Brush this mixture over the smashed potatoes.
Bake in the preheated oven for 20-25 minutes, or until the potatoes are golden brown and crispy.
While the potatoes are baking, prepare the dressing by whisking together the mayonnaise, Dijon mustard, apple cider vinegar, chives, bacon (if using), and red onion in a large bowl.
Once the potatoes are done, let them cool for a few minutes before adding them to the dressing. Toss gently to coat the potatoes evenly.
Serve warm or at room temperature.