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I worked at Optimizely from before its series A in 2012 until the end of 2016, so I have a unique perspective on this. For most of the time when I worked at Opt

I worked at Optimizely from before its series A in 2012 until the end of 2016, so I have a unique perspective on this. For most of the time when I worked at Optimizely, the company was all the rage. It appeared at the top of most "hot startup" lists, the Glassdoor reviews were 5/5, revenue was skyrocketing, and for a period in 2014 it became the fourth most valuable YCombinator company (after Stripe, AirBnB, and Dropbox). Of course, Optimizely's success was't guaranteed. In 2015, the company abandoned the self-serve market that had driven its original momentum and pivoted instead to vague and indefinite enterprise offerings that were (and are) hidden behind schizophrenic marketing, an impossible sales process, terrible customer service and a general approach of trying to extract the maximum amount of money from clients rather than providing them with value. From 2015 on, everything (including the internal culture) became mumbo-jumbo, a cloud of dishonesty. I used to be able to explain what Optimizely did to my grandmother; now I don't even really understand it myself. Th Episerver acquisition is indeed a bad exit, and I think I will lose >$100k in stock I exercised (which is OK, I'll be fine). But I hope all readers will take from this saga a lesson in humility and the pitfalls of intellectual dishonesty and hubris. Just because your startup is skyrocketing isn't enough. Success is not guaranteed. Your company's leadership needs to be honest with itself, which Optimizely's leadership was not. They need to be humble and work hard, which Optimizely did not do.

roasm 6y ago
If you can share, what was the dishonesty you're writing about? I can't tell if you're saying it was fraudulent dishonesty or self-delusion (where you think you're in a better position than you really are). And do you know if the self-sever market was drying up for Optimizely in 2015? I assume they wouldn't abandon it if it was growing at a decent rate.
jameslk 6y ago
I wonder how Google Optimize factors into this. Provided its a free service, it seems like Optimizely may have had trouble offering something unique to the self-serve market over something that is completely free. Similar to how it seems Dropbox has less to differentiate itself from Google Drive and other similar services these days.
- pbreit 6y ago
  I think Google is less of a threat than many believe because Google products have to address a Google-sized market which leaves tremendous room for competitors. If you're going to go straight up against Google then, sure, you're going to get clobbered.
sharkweek 6y ago
Funny - I worked for two SaaS businesses that at one point used Optimizely and loved (and I mean LOVED) it. But I distinctly remember at the second job, that incredibly rough transition to that vague enterprise pricing structure along with the software getting clunkier and clunkier, which led us to abandon them and never look back. I think at one point they were trying to get us to go from paying $99 a month (!!!) to like $3,000 a month for virtually the same service??
- deleted 6y ago
  [deleted]
dataminded 6y ago
That's the phrase I was looking for. Their sales process is impossible.
- Silhouette 6y ago
  They appear to have become a great example of why the small businesses I run typically just walk away from any service we were potentially interested in using if we see a pricing page containing the word "call" but no actual pricing. If you're going to aim for high-touch enterprise sales, that's your choice, it's your business. However, the chances that you will then provide either acceptable quality of service or good value to anyone on the smaller end of the scale tends to zero IME, so it saves everyone time if we look elsewhere immediately. The problems start if it turns out that these companies aren't actually generating enough value to justify the enterprise-level costs either. For example, say you're running a tool that allows people to quickly experiment with multiple versions of their web site, measure some quantifiable success rate for each version, and perform some basic statistical analysis to guide future changes and improve conversion rates. A basic but useful version of this tool can be implemented in a few days by one competent developer and one competent statistician; I suspect quite a few people reading this discussion have done exactly that. Polishing the tool might take longer and improve its utility somewhat, but it's not as though it's using some secret technique that no normal business can implement for themselves in-house. At the mostly-self-service end of the spectrum, it might still be worth customers spending a bit of money on the pre-existing tool you make to do that job for them, because you're really competing on immediacy and convenience as much as technical capabilities. At the enterprise level, your competition could instead be some in-house team or some freelancer or agency being brought in from outside just to develop a tool directly for your customer. If they're potentially doing that at a cost less than just the first year of annual fees you're demanding up-front, and according to the customer's exact requirements, both of which seem quite plausible in a case like Optimizely's based on information in other comments here, what exactly is your sales pitch?
  - mattkevan 6y ago
    When I used to work for one of the UK’s largest social networks, I spent a long time researching optimisation platforms. I’d used Optimizely before and liked it, but when I saw the pricing table had been replaced by the dreaded ‘Call’ CTA I knew we were in for a bad time. When I finally negotiated the rigmarole of callbacks and salespeople, the quote we received was so ludicrously high that there was not a chance that it was ever going to be worthwhile. Especially considering their old self-serve model was pretty good value and the horde of functionally identical and much cheaper competitors.
jmacd 6y ago
Speaking as a customer, it feels like this is exactly what is happening to Mode Analytics right now.
- will_lam 6y ago
  As a customer of Mode, why not give Taplytics a shot? :)
- Reema_ 6y ago
  Please try https://www.webtrends-optimize.com/ https://www.webtrends-optimize.com/ We are known for our good customer services
pbreit 6y ago
Why Stripe will likely win: https://news.ycombinator.com/item?id=24067211 https://news.ycombinator.com/item?id=24067211 Continuing self-service while expanding "up market" into the enterprise. If AWS can be self-service, pretty much any service can be.
- polote 6y ago
  This is different, both Stripe and AWS users are developers. I don't know how you can be so sure that Stripe will win, Adyen is already on the enterprise space, and they are a bigger company than Stripe. > Continuing self-service while expanding "up market" into the enterprise. Things are more complex than a sentence, the whole company needs to operate differently https://blog.luap.info/why-most-saas-companies-cant-be-successful-with-both-enterprise-and-smb-customers.html https://blog.luap.info/why-most-saas-companies-cant-be-succe...
  - deleted 6y ago
    [deleted]
  - IgorPartola 6y ago
    Stripe users are also anyone who wants to run a website on Wix or Squarespace or WordPress/WooCommerce and want to sell things. I have personally seen people that can’t spell “HTML” successfully set up basic eCommerce sites and make money off them. There is zero reason to pigeonhole Stripe as being for developers only any more than Square, etc.
- twunde 6y ago
  Stripe may expand "up market" at some point, but at the moment they're pretty enterprise unfriendly and don't seem interested in becoming enterprise friendly. You can't pay for phone support, their PCI compliance can cause some enterprise customers to blink and even if you're funneling millions through them they won't negotiate on price like other payment gateways. Also many of their more advanced features, just aren't that well implemented or documented (think connected accounts, etc) and since those cases aren't as heavily used we've had to side-channel to a C-level to get an issue expedited after bouncing around support for a show-stopper bug. Additionally as a sidenote, that market is quite crowded with a LOT of choices. This is certainly not a winner take all industry, there are literally 20+ choices that will be reliable. Typically most large enterprises will end up with a vendor that will give them a good deal on rates, which isn't Stripe.
deleted 6y ago
[deleted]
m3kw9 6y ago
Love these insights
pmiller2 6y ago
Surely you're joking, Mr. Feynman. (Sorry, I've kind of always wanted to be able to say that in casual conversation and not have it be a total non sequitor.) But, seriously, your description does sound exactly like a company on the decline. I couldn't blame you for bailing. What do you think the first signs that things were terminal there?
poof131 6y ago
I joined in 2015 and left after 2 months. I had left a fast growing late-stage startup, AppDynamics, where revenue was doubling every 12 months, from $75M to about $150M when I left. The director of engineering at Optimizely who hired me said their revenue was doubling too, from $40M to $80M. At the next all hands a few weeks later, the CEO said revenue had been declining slightly for 2 straight quarters. At lunch, after the all hands, no one seemed to care. Someone literally complained that their friends at AirBnb got duck for lunch and we didn’t. The director either lied to me or didn’t know. People were nice and smart, but it was clearly going off a cliff. It seems for many B2B startups the march up the value chain to enterprise is challenging, especially with regards to pricing. I remember the president of sales at AppDyanmics would not cut prices to compete against New Relic in the self-serve market. At Optimizely, I recall enterprises were pissed at being charged more just for better SLAs. From other comments it sounds like they finally figured out the enterprise pricing model by jettisoning self-service. Not sure if that was the right call or they could have found better success by avoiding the pricing consultant fiasco. Though I vaguely recall they were losing too much money per customer so that needed fixing. In any event, it’s hard enough to make money in startups as an employee, but declining revenue at a growth stage startup is a death sentence for your equity. I liked the people at Optimizely, the transparent culture was great, and I wished it would have done better, but the writing was on the wall. Sure enough, not long after leaving the first round of layoffs came, private equity invested, and the announcement was revenues doubled over the prior 18 months, minus the detail of the last 6 being flat to down. Sorry to hear about the impact on you. This is a problem with the current state of startups staying private longer and why I likely won’t work for one that doesn’t have an extended exercise window [1]. [1] https://zachholman.com/posts/fuck-your-90-day-exercise-window/ https://zachholman.com/posts/fuck-your-90-day-exercise-windo...
- mrnobody_67 6y ago
  The pricing consultant they brought in was Simon Kutcher...
tptacek 6y ago
I have a sort of general question about this narrative, which seems to apply to lots of startups that begin as self-service, developer-focused projects and end in enterprise hell. Is it not the case that these startups begin developer-facing, get market traction, are lavishly funded, and then discover that the self-service offering they've built simply can't satisfy the projections they've made to justify their valuation? Which is to say: would Optimizely be doing much better if they hadn't pivoted into enterprise hell? Or would they be a much smaller company? I see why customers would have a strong preference! But it's less clear to me what the right decision for the business is. But I'm just asking!
- kirillzubovsky 6y ago
  To piggyback on this question, I am also curious - would Optimizely choose to go this Enterprise sales route if it weren't for their sky high valuation back in the day. How much of this change was driven by the customers' need vs. a perceived opportunity to grow the company?
  - totallynotabot 6y ago
    You know the answer to this question. Rationalizations may have included lines like “pivoting to enterprise will help us help even more customers” but it’s all about growth and TAM.
- reggieband 6y ago
  > then discover that the self-service offering they've built simply can't satisfy the projections they've made to justify their valuation? I suspect a lot of startups sell their investors on enterprise from the get-go. Self-serve can be seen as a foot in the door, a way to prospect potential enterprise opportunities. They watch self-serve sign-ups for a bigcorp.com domain and then hand it over to account sales and swing for the fences. I think a big problem is differentiating your self-serve from your enterprise offering. You don't want bigcorp.com to feel happy enough with your $20/month foot in the door offering. And at the same time enterprises aren't stupid money fountains and they don't just sign $100k/year contracts unless they see major value. I think this creates a volatile business where a dozen or so enterprises make up the lions share of revenue for a startup and the thousands of self-serve customers are just kind of there like background noise.
deedub 6y ago
I'm kinda curious about your >$100k loss on your stock. Your strike price from pre series A options was more than the gains on a near $600 million sale price? Maybe I am misunderstanding, but how is that possible?
- redshirtrob 6y ago
  Probably the op spent $100k to exercise the options. It's likely this deal will wipe out all common shareholders and only the VCs will get anything. That's a $100k loss. The op will be spending the next decade writing this loss off against capital gains and earned income. I've been there.
  - gkop 6y ago
    Can you write off just the exercise price or the fair market value at time of exercise?
    - redshirtrob 6y ago
      That's a really good question. I'm not certain of the answer. When I had this happen to me the FMV was slightly higher than my exercise price, but not enough to trigger AMT. I know I only wrote off the actual cash I lost, and I used a CPA to help me make sure I did it correctly.
    - zls 6y ago
      I recently asked a tax advisor a similar question: if I do a cashless exercise sale for $5 when the FMV is $6 and my strike price is $2, can I pay income tax only on the $5 sale price? The answer was no: I would owe income at the $6 price and then immediately accrue capital losses on the $1 spread between sale and FMV. I guess that's a longwinded way of saying "I doubt it". Tax law around employee options is brutal. :/
    - ng12 6y ago
      Yes, capped at $3,000/year.
    - 6y ago
ryguytilidie 6y ago
I worked there in 2013. I very specifically remember getting a speech about how if we didn't believe that the company would be worth more than google, we should quit. Seems like that may have been a better option for a lot of folks.
- BurntBunting 6y ago
  Was that the one where Dan told people that they were traitors for wanting more cash instead of stock, not super long after some of them cashed out some of their equity?
- redshirtrob 6y ago
  Wow, I was interviewing there in 2013. I was interviewing for a fairly senior engineering position. When they sent me the details for the on-site they sent me a role two levels lower. When I asked about it I was told the Director of Engineering felt that was a suitable role. I withdrew from the process at that point. I was pretty bummed as I was super high on Optimizely back then. But I knew enough about myself to know that wasn't a good way to start a job (assuming I got an offer).
codezero 6y ago
That's really interesting. I work along side Optimizely in the analytics field and I remember that moment - I used to email into support@ to ask about stuff to help improve data across our platforms, and always had no problem. Almost over night the email support was shut off (in support of optiverse + partners, a route I totally get when you're trying to move upmarket) but it felt really forced, really fast and I think they could have done a better job ramping up enterprise without slamming all the self-serve and free customers. My company is going through a similar phase of trying to move more up market, and I'm glad we've tried to keep the free/self-serve tiers explicitly because we think they build good mindshare.
smallgovt 6y ago
> The Episerver acquisition is indeed a bad exit, and I think I will lose >$100k in stock I exercised Based on what information? So far, all that's been publicly confirmed is that the sale price was below $600M, which presumably leaves opportunity for your shares to be worth something.
- triceratops 6y ago
  GP probably got information about the share price offered from current employees and did the math. Once the acquisition is finalized, they'll receive more details since they are a shareholder.
  - richardFINEman 6y ago
    Employees don't know share or exit price yet. Won't be announced for a few more months. However, if the OP is speaking the truth about the timeframe he got shares from, he is guaranteed to be up. There are definitely people who lost money on this deal, but definitely not Series A people.
RobertoG 6y ago
I initially misread the title as "optimized to be acquired [..]" Maybe my serendipitous reading explain your observations of what happened to the company.
triceratops 6y ago
Wow. I interviewed there in 2015 and got turned down. Wasn't a great interview experience either. Bullet dodged, I supposed.
- nicktoknowyou 6y ago
  Me too - super arrogant. While I clearly wasn't what they were looking for, I had a lousy taste in my mouth after that experience. I still remember an awkward moment when I answered a question and the interviewer circled back to remind me I hadn't fully answered his question (he was right, but it just felt unnecessarily didactic).
mlthoughts2018 6y ago
This description absolutely nails Foursquare as well.
KingOfCoders 6y ago
My impression is Optimizely never crossed the chasm. Huge following with VC funded startups and early stage startups but never crossed into "Google Analytics" territory where every company with a website was using it. Slowing down users meant higher prices to sustain VC promised growth. Higher prices meant enterprise sales. And it went down from there.
- porker 6y ago
  I'd say in the early days they were on the way to getting that mindshare. I had SME clients using them, where VWO was cheaper but they didn't like using VWO. When Optimizely hiked their prices and lost the smallest plan, all these clients went elsewhere. I'm sure their contribution was noise to Optimizely's turnover, but the awareness of what was possible with A/B testing and the way they'd tell their friends about Optimizely and what they'd just done on their website - you couldn't buy that exposure.
- brentsabully 6y ago
  Yeah, I agree. I think the use cases weren't substantial enough so people just didn't use it enough to justify subscriptions in most cases. This means high customer churn, especially if they were selling to customers based on strength of their name (which I think they were, to digital marketers who conned themselves into believe it was a product they needed). They received funding from a PE firm (Insight Partners) who were probably eager to get a return.
horseluvvaslim 6y ago
Worth noting that Optimizely is the A/B testing tool of choice for donaldjtrump.com.
- jimbojones79 6y ago
  This is unfair. That contract was sold to the Republican National Committee 3 years ago. They also sold to most of the democrat campaigns. I'd be careful about any business with over 1,000 customers, chances are they have a few shady clients in their portfolio.
- the_washout 6y ago
  To be fair, there was a pretty vigorous internal debate about what to do about that a couple months back. There's a huge segment of the employee base who were advocating for canceling the contract with the RNC (the Trump campaign piggybacked off that).

roasm 6y ago

If you can share, what was the dishonesty you're writing about? I can't tell if you're saying it was fraudulent dishonesty or self-delusion (where you think you're in a better position than you really are). And do you know if the self-sever market was drying up for Optimizely in 2015? I assume they wouldn't abandon it if it was growing at a decent rate.

jameslk 6y ago

I wonder how Google Optimize factors into this. Provided its a free service, it seems like Optimizely may have had trouble offering something unique to the self-serve market over something that is completely free. Similar to how it seems Dropbox has less to differentiate itself from Google Drive and other similar services these days.

pbreit 6y ago
I think Google is less of a threat than many believe because Google products have to address a Google-sized market which leaves tremendous room for competitors. If you're going to go straight up against Google then, sure, you're going to get clobbered.

sharkweek 6y ago

Funny - I worked for two SaaS businesses that at one point used Optimizely and loved (and I mean LOVED) it. But I distinctly remember at the second job, that incredibly rough transition to that vague enterprise pricing structure along with the software getting clunkier and clunkier, which led us to abandon them and never look back. I think at one point they were trying to get us to go from paying $99 a month (!!!) to like $3,000 a month for virtually the same service??

deleted 6y ago
[deleted]

dataminded 6y ago

That's the phrase I was looking for. Their sales process is impossible.

Silhouette 6y ago
They appear to have become a great example of why the small businesses I run typically just walk away from any service we were potentially interested in using if we see a pricing page containing the word "call" but no actual pricing. If you're going to aim for high-touch enterprise sales, that's your choice, it's your business. However, the chances that you will then provide either acceptable quality of service or good value to anyone on the smaller end of the scale tends to zero IME, so it saves everyone time if we look elsewhere immediately. The problems start if it turns out that these companies aren't actually generating enough value to justify the enterprise-level costs either. For example, say you're running a tool that allows people to quickly experiment with multiple versions of their web site, measure some quantifiable success rate for each version, and perform some basic statistical analysis to guide future changes and improve conversion rates. A basic but useful version of this tool can be implemented in a few days by one competent developer and one competent statistician; I suspect quite a few people reading this discussion have done exactly that. Polishing the tool might take longer and improve its utility somewhat, but it's not as though it's using some secret technique that no normal business can implement for themselves in-house. At the mostly-self-service end of the spectrum, it might still be worth customers spending a bit of money on the pre-existing tool you make to do that job for them, because you're really competing on immediacy and convenience as much as technical capabilities. At the enterprise level, your competition could instead be some in-house team or some freelancer or agency being brought in from outside just to develop a tool directly for your customer. If they're potentially doing that at a cost less than just the first year of annual fees you're demanding up-front, and according to the customer's exact requirements, both of which seem quite plausible in a case like Optimizely's based on information in other comments here, what exactly is your sales pitch?
- mattkevan 6y ago
  When I used to work for one of the UK’s largest social networks, I spent a long time researching optimisation platforms. I’d used Optimizely before and liked it, but when I saw the pricing table had been replaced by the dreaded ‘Call’ CTA I knew we were in for a bad time. When I finally negotiated the rigmarole of callbacks and salespeople, the quote we received was so ludicrously high that there was not a chance that it was ever going to be worthwhile. Especially considering their old self-serve model was pretty good value and the horde of functionally identical and much cheaper competitors.

jmacd 6y ago

Speaking as a customer, it feels like this is exactly what is happening to Mode Analytics right now.

will_lam 6y ago
As a customer of Mode, why not give Taplytics a shot? :)
Reema_ 6y ago
Please try https://www.webtrends-optimize.com/ https://www.webtrends-optimize.com/ We are known for our good customer services

pbreit 6y ago

Why Stripe will likely win: https://news.ycombinator.com/item?id=24067211 https://news.ycombinator.com/item?id=24067211 Continuing self-service while expanding "up market" into the enterprise. If AWS can be self-service, pretty much any service can be.

polote 6y ago
This is different, both Stripe and AWS users are developers. I don't know how you can be so sure that Stripe will win, Adyen is already on the enterprise space, and they are a bigger company than Stripe. > Continuing self-service while expanding "up market" into the enterprise. Things are more complex than a sentence, the whole company needs to operate differently https://blog.luap.info/why-most-saas-companies-cant-be-successful-with-both-enterprise-and-smb-customers.html https://blog.luap.info/why-most-saas-companies-cant-be-succe...
- deleted 6y ago
  [deleted]
- IgorPartola 6y ago
  Stripe users are also anyone who wants to run a website on Wix or Squarespace or WordPress/WooCommerce and want to sell things. I have personally seen people that can’t spell “HTML” successfully set up basic eCommerce sites and make money off them. There is zero reason to pigeonhole Stripe as being for developers only any more than Square, etc.
twunde 6y ago
Stripe may expand "up market" at some point, but at the moment they're pretty enterprise unfriendly and don't seem interested in becoming enterprise friendly. You can't pay for phone support, their PCI compliance can cause some enterprise customers to blink and even if you're funneling millions through them they won't negotiate on price like other payment gateways. Also many of their more advanced features, just aren't that well implemented or documented (think connected accounts, etc) and since those cases aren't as heavily used we've had to side-channel to a C-level to get an issue expedited after bouncing around support for a show-stopper bug. Additionally as a sidenote, that market is quite crowded with a LOT of choices. This is certainly not a winner take all industry, there are literally 20+ choices that will be reliable. Typically most large enterprises will end up with a vendor that will give them a good deal on rates, which isn't Stripe.

deleted 6y ago

[deleted]

m3kw9 6y ago

Love these insights

pmiller2 6y ago

Surely you're joking, Mr. Feynman. (Sorry, I've kind of always wanted to be able to say that in casual conversation and not have it be a total non sequitor.) But, seriously, your description does sound exactly like a company on the decline. I couldn't blame you for bailing. What do you think the first signs that things were terminal there?

poof131 6y ago

I joined in 2015 and left after 2 months. I had left a fast growing late-stage startup, AppDynamics, where revenue was doubling every 12 months, from $75M to about $150M when I left. The director of engineering at Optimizely who hired me said their revenue was doubling too, from $40M to $80M. At the next all hands a few weeks later, the CEO said revenue had been declining slightly for 2 straight quarters. At lunch, after the all hands, no one seemed to care. Someone literally complained that their friends at AirBnb got duck for lunch and we didn’t. The director either lied to me or didn’t know. People were nice and smart, but it was clearly going off a cliff. It seems for many B2B startups the march up the value chain to enterprise is challenging, especially with regards to pricing. I remember the president of sales at AppDyanmics would not cut prices to compete against New Relic in the self-serve market. At Optimizely, I recall enterprises were pissed at being charged more just for better SLAs. From other comments it sounds like they finally figured out the enterprise pricing model by jettisoning self-service. Not sure if that was the right call or they could have found better success by avoiding the pricing consultant fiasco. Though I vaguely recall they were losing too much money per customer so that needed fixing. In any event, it’s hard enough to make money in startups as an employee, but declining revenue at a growth stage startup is a death sentence for your equity. I liked the people at Optimizely, the transparent culture was great, and I wished it would have done better, but the writing was on the wall. Sure enough, not long after leaving the first round of layoffs came, private equity invested, and the announcement was revenues doubled over the prior 18 months, minus the detail of the last 6 being flat to down. Sorry to hear about the impact on you. This is a problem with the current state of startups staying private longer and why I likely won’t work for one that doesn’t have an extended exercise window [1]. [1] https://zachholman.com/posts/fuck-your-90-day-exercise-window/ https://zachholman.com/posts/fuck-your-90-day-exercise-windo...

mrnobody_67 6y ago
The pricing consultant they brought in was Simon Kutcher...

tptacek 6y ago

I have a sort of general question about this narrative, which seems to apply to lots of startups that begin as self-service, developer-focused projects and end in enterprise hell. Is it not the case that these startups begin developer-facing, get market traction, are lavishly funded, and then discover that the self-service offering they've built simply can't satisfy the projections they've made to justify their valuation? Which is to say: would Optimizely be doing much better if they hadn't pivoted into enterprise hell? Or would they be a much smaller company? I see why customers would have a strong preference! But it's less clear to me what the right decision for the business is. But I'm just asking!

kirillzubovsky 6y ago
To piggyback on this question, I am also curious - would Optimizely choose to go this Enterprise sales route if it weren't for their sky high valuation back in the day. How much of this change was driven by the customers' need vs. a perceived opportunity to grow the company?
- totallynotabot 6y ago
  You know the answer to this question. Rationalizations may have included lines like “pivoting to enterprise will help us help even more customers” but it’s all about growth and TAM.
reggieband 6y ago
> then discover that the self-service offering they've built simply can't satisfy the projections they've made to justify their valuation? I suspect a lot of startups sell their investors on enterprise from the get-go. Self-serve can be seen as a foot in the door, a way to prospect potential enterprise opportunities. They watch self-serve sign-ups for a bigcorp.com domain and then hand it over to account sales and swing for the fences. I think a big problem is differentiating your self-serve from your enterprise offering. You don't want bigcorp.com to feel happy enough with your $20/month foot in the door offering. And at the same time enterprises aren't stupid money fountains and they don't just sign $100k/year contracts unless they see major value. I think this creates a volatile business where a dozen or so enterprises make up the lions share of revenue for a startup and the thousands of self-serve customers are just kind of there like background noise.

deedub 6y ago

I'm kinda curious about your >$100k loss on your stock. Your strike price from pre series A options was more than the gains on a near $600 million sale price? Maybe I am misunderstanding, but how is that possible?

redshirtrob 6y ago
Probably the op spent $100k to exercise the options. It's likely this deal will wipe out all common shareholders and only the VCs will get anything. That's a $100k loss. The op will be spending the next decade writing this loss off against capital gains and earned income. I've been there.
- gkop 6y ago
  Can you write off just the exercise price or the fair market value at time of exercise?
  - redshirtrob 6y ago
    That's a really good question. I'm not certain of the answer. When I had this happen to me the FMV was slightly higher than my exercise price, but not enough to trigger AMT. I know I only wrote off the actual cash I lost, and I used a CPA to help me make sure I did it correctly.
  - zls 6y ago
    I recently asked a tax advisor a similar question: if I do a cashless exercise sale for $5 when the FMV is $6 and my strike price is $2, can I pay income tax only on the $5 sale price? The answer was no: I would owe income at the $6 price and then immediately accrue capital losses on the $1 spread between sale and FMV. I guess that's a longwinded way of saying "I doubt it". Tax law around employee options is brutal. :/
  - ng12 6y ago
    Yes, capped at $3,000/year.
  - 6y ago

ryguytilidie 6y ago

I worked there in 2013. I very specifically remember getting a speech about how if we didn't believe that the company would be worth more than google, we should quit. Seems like that may have been a better option for a lot of folks.

BurntBunting 6y ago
Was that the one where Dan told people that they were traitors for wanting more cash instead of stock, not super long after some of them cashed out some of their equity?
redshirtrob 6y ago
Wow, I was interviewing there in 2013. I was interviewing for a fairly senior engineering position. When they sent me the details for the on-site they sent me a role two levels lower. When I asked about it I was told the Director of Engineering felt that was a suitable role. I withdrew from the process at that point. I was pretty bummed as I was super high on Optimizely back then. But I knew enough about myself to know that wasn't a good way to start a job (assuming I got an offer).

codezero 6y ago

That's really interesting. I work along side Optimizely in the analytics field and I remember that moment - I used to email into support@ to ask about stuff to help improve data across our platforms, and always had no problem. Almost over night the email support was shut off (in support of optiverse + partners, a route I totally get when you're trying to move upmarket) but it felt really forced, really fast and I think they could have done a better job ramping up enterprise without slamming all the self-serve and free customers. My company is going through a similar phase of trying to move more up market, and I'm glad we've tried to keep the free/self-serve tiers explicitly because we think they build good mindshare.

smallgovt 6y ago

> The Episerver acquisition is indeed a bad exit, and I think I will lose >$100k in stock I exercised Based on what information? So far, all that's been publicly confirmed is that the sale price was below $600M, which presumably leaves opportunity for your shares to be worth something.

triceratops 6y ago
GP probably got information about the share price offered from current employees and did the math. Once the acquisition is finalized, they'll receive more details since they are a shareholder.
- richardFINEman 6y ago
  Employees don't know share or exit price yet. Won't be announced for a few more months. However, if the OP is speaking the truth about the timeframe he got shares from, he is guaranteed to be up. There are definitely people who lost money on this deal, but definitely not Series A people.

RobertoG 6y ago

I initially misread the title as "optimized to be acquired [..]" Maybe my serendipitous reading explain your observations of what happened to the company.

triceratops 6y ago

Wow. I interviewed there in 2015 and got turned down. Wasn't a great interview experience either. Bullet dodged, I supposed.

nicktoknowyou 6y ago
Me too - super arrogant. While I clearly wasn't what they were looking for, I had a lousy taste in my mouth after that experience. I still remember an awkward moment when I answered a question and the interviewer circled back to remind me I hadn't fully answered his question (he was right, but it just felt unnecessarily didactic).

mlthoughts2018 6y ago

This description absolutely nails Foursquare as well.

KingOfCoders 6y ago

My impression is Optimizely never crossed the chasm. Huge following with VC funded startups and early stage startups but never crossed into "Google Analytics" territory where every company with a website was using it. Slowing down users meant higher prices to sustain VC promised growth. Higher prices meant enterprise sales. And it went down from there.

porker 6y ago
I'd say in the early days they were on the way to getting that mindshare. I had SME clients using them, where VWO was cheaper but they didn't like using VWO. When Optimizely hiked their prices and lost the smallest plan, all these clients went elsewhere. I'm sure their contribution was noise to Optimizely's turnover, but the awareness of what was possible with A/B testing and the way they'd tell their friends about Optimizely and what they'd just done on their website - you couldn't buy that exposure.
brentsabully 6y ago
Yeah, I agree. I think the use cases weren't substantial enough so people just didn't use it enough to justify subscriptions in most cases. This means high customer churn, especially if they were selling to customers based on strength of their name (which I think they were, to digital marketers who conned themselves into believe it was a product they needed). They received funding from a PE firm (Insight Partners) who were probably eager to get a return.

horseluvvaslim 6y ago

Worth noting that Optimizely is the A/B testing tool of choice for donaldjtrump.com.

jimbojones79 6y ago
This is unfair. That contract was sold to the Republican National Committee 3 years ago. They also sold to most of the democrat campaigns. I'd be careful about any business with over 1,000 customers, chances are they have a few shady clients in their portfolio.
the_washout 6y ago
To be fair, there was a pretty vigorous internal debate about what to do about that a couple months back. There's a huge segment of the employee base who were advocating for canceling the contract with the RNC (the Trump campaign piggybacked off that).