<story><title>Optimizely to be acquired by Episerver</title><url>https://www.bloomberg.com/news/articles/2020-09-03/goldman-backed-startup-optimizely-to-be-acquired-by-episerver</url></story><parent_chain><item><author>tptacek</author><text>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.&lt;p&gt;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&amp;#x27;ve built simply can&amp;#x27;t satisfy the projections they&amp;#x27;ve made to justify their valuation?&lt;p&gt;Which is to say: would Optimizely be doing much better if they hadn&amp;#x27;t pivoted into enterprise hell? Or would they be a much smaller company?&lt;p&gt;I see why customers would have a strong preference! But it&amp;#x27;s less clear to me what the right decision for the business is. But I&amp;#x27;m just asking!</text></item><item><author>richardfeynman</author><text>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 &amp;quot;hot startup&amp;quot; lists, the Glassdoor reviews were 5&amp;#x2F;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&amp;#x27;s success was&amp;#x27;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&amp;#x27;t even really understand it myself.&lt;p&gt;Th Episerver acquisition is indeed a bad exit, and I think I will lose &amp;gt;$100k in stock I exercised (which is OK, I&amp;#x27;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&amp;#x27;t enough. Success is not guaranteed. Your company&amp;#x27;s leadership needs to be honest with itself, which Optimizely&amp;#x27;s leadership was not. They need to be humble and work hard, which Optimizely did not do.</text></item></parent_chain><comment><author>kelnos</author><text>It&amp;#x27;s possible to do both.  At Twilio we started as a self-service, developer-focused company.  Today we have many large enterprise customers (and spend a lot of effort to court those kinds of customers), but we still have a huge number of small developers, and one-person hobby shops can and do still easily set themselves up to use our platform.  We &lt;i&gt;have&lt;/i&gt; added some enterprise-only features, which I sometimes have mixed feelings about, but everything that&amp;#x27;s traditionally been available to non-enterprises is still available to anyone with a credit card.&lt;p&gt;I completely agree with you on (at least in terms of Twilio&amp;#x27;s experience):&lt;p&gt;&amp;gt; &lt;i&gt;would Optimizely be doing much better if they hadn&amp;#x27;t pivoted into enterprise hell? Or would they be a much smaller company?&lt;/i&gt;&lt;p&gt;We were definitely going to hit a ceiling if we didn&amp;#x27;t add enterprise features and work on getting all the various certifications that large companies will require to even start talking to you, and build a sales force that knew how to sell to larger companies.  If we hadn&amp;#x27;t done all that, we&amp;#x27;d be a much smaller company today, and likely a competitor would have done it instead and eaten our lunch.</text></comment>
<story><title>Optimizely to be acquired by Episerver</title><url>https://www.bloomberg.com/news/articles/2020-09-03/goldman-backed-startup-optimizely-to-be-acquired-by-episerver</url></story><parent_chain><item><author>tptacek</author><text>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.&lt;p&gt;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&amp;#x27;ve built simply can&amp;#x27;t satisfy the projections they&amp;#x27;ve made to justify their valuation?&lt;p&gt;Which is to say: would Optimizely be doing much better if they hadn&amp;#x27;t pivoted into enterprise hell? Or would they be a much smaller company?&lt;p&gt;I see why customers would have a strong preference! But it&amp;#x27;s less clear to me what the right decision for the business is. But I&amp;#x27;m just asking!</text></item><item><author>richardfeynman</author><text>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 &amp;quot;hot startup&amp;quot; lists, the Glassdoor reviews were 5&amp;#x2F;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&amp;#x27;s success was&amp;#x27;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&amp;#x27;t even really understand it myself.&lt;p&gt;Th Episerver acquisition is indeed a bad exit, and I think I will lose &amp;gt;$100k in stock I exercised (which is OK, I&amp;#x27;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&amp;#x27;t enough. Success is not guaranteed. Your company&amp;#x27;s leadership needs to be honest with itself, which Optimizely&amp;#x27;s leadership was not. They need to be humble and work hard, which Optimizely did not do.</text></item></parent_chain><comment><author>richardFINEman</author><text>I worked at Optimizely for 4 years and can tell you that pivoting to Enterprise has been one of the best company decisions.&lt;p&gt;One of the important distinctions between Optimizely and most developer-first platforms is that experimentation is a hard practice to pick up. Most companies have difficulties getting their programs off the ground and keeping them funded, let alone grow or scale them. Small digital businesses struggle more for several reasons: 1) they have few resources, so teams are understaffed and resources are pulled easily, 2) they have little money, so the percentage uplifts are rarely motivating, 3) they have little traffic, so it is harder to get a statistically significant measure in their experiments&lt;p&gt;Because of these issues, Optimizely always had really poor retention in the SMB space. Nonetheless, the SMB customers helped Optimizely build up a brand name, build up legions of practitioners, and get the skills and experience to go after the Enterprise market. When Optimizely started acquiring enterprise customers, retention improved substantially.&lt;p&gt;This isn&amp;#x27;t to say that there aren&amp;#x27;t lots of problems with Enterprise sales and that Optimizely didn&amp;#x27;t make tons of cultural mistakes in that pivot. But on the core financials, Enterprise kept Optimizely afloat. The problem wasn&amp;#x27;t the pivot to enterprise, but the trade-offs that were mismanaged along the way. The path to enterprise was inevitable and correct.</text></comment>