This startup CEO delivered a cold splash of water about the market in a layoff email


Layoffs are rippling through Silicon Valley tech startups as the venture market cools, and today Optimizely joined the list, cutting about 40 workers from its staff of 400.


Optimizely makes software for testing different web site layouts against one another in real time to see which performs best - called A/B testing. It's received $146 million in venture funding, including a $58 million round last October. In a blog post CEO Dan Siroker says it's now the most-used web site optimization platform in the world.

But Siroker also delivered a tough dose of reality in his email to employees about the layoffs.

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He wrote (emphasis ours):

In August 2015, we began our journey to Control Our Own Destiny, which means controlling the path we are on as a company without having to depend on anyone but ourselves. In order to do that we must build a business that makes more money than it spends. We set a goal of getting to cash flow breakeven and we have made tremendous progress toward this goal.



I'm incredibly thankful we embraced this journey in August because on February 5th, our entire industry got a wake up call. On that day, public cloud companies collectively lost $28B in market value on a single day. Some of the market value has recovered since then, but the market has clearly shifted.

February 5 was a brutal day on the markets in which public tech companies Tableau (which helps companies analyze business data) and LinkedIn both lost about half their value after disappointing earnings report.

This doesn't mean that every venture-backed startup will have trouble raising more money at higher valuations - just yesterday, it came out that real estate leasing company WeWork is raising more than $400 million and is now worth $16 billion, the same as Snapchat.

But WeWork, like Uber, is exceptional. For most tech startups, the time has come to prove that they can build a sustainable business now, rather than depending on the idea that there will be endless rounds of venture funding to help sustain them.


You can read Siroker's blog post, which includes his entire email to his employees, here>>

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