
Optimizely Raises $57 Million - dsiroker
http://blog.optimizely.com/2014/05/05/optimizely-series-b-funding/
======
aelaguiz
I love this company. We use them every day and we recommend them to all of our
merchants (who in turn love them). Their product is in a small but
distinguished group of tools that are so good they set a new standard. I
consider circleci amongst that group, for reference.

Congrats guys

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porker
I would love to know what other products are in your group.

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tnorthcutt
Congrats on the funding.

Perhaps Optimizely should run a test on their blog to see if their overall
revenue is truly boosted by blocking cmd/ctrl+click on the "homepage" link (or
pricing, or about). I'm reading the blog post, but want to also open their
sales site in another tab, and... I can't. Feels like a bad idea to me, but
maybe there's some logic behind it?

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svmegatron
Weirdly, middle-click (at least for me) does open the link in a new tab. If I
were to venture a guess, it would be that that behavior was unintentional. If
it wasn't, I'm also curious about the logic behind it.

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evmar
Just in case someone from Optimizely looks at this: I was curious so I
examined the JS source. It appears the "munchkin.js" helper is the most likely
candidate. The code is obfuscated but I see a click event listener that is
doing logic related to detecting the control key and simulating a mouse event.
It's probably broken on Macs.

(In general, intercepting browser events and generating your own interacts
poorly with obscure behaviors like ctl-click as well with popup blockers.)

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wellboy
Wow huge round for 7,000 users, but I think I missed something. The plans
range from $14 to $293/month and then there is an enterpise plan. If we say
the average revenue/user is $100/month that would be $700,000 in revenue/month
* 12 = $1.14M/year? Pretty impressive for 7,000 users, however, with 200
employees the burn rate is $10M/year?

Despite that the valuation is $200M, what did I miss?

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beambot
$700k/mo * 12 = $8.4M/year (not $1.14M). So they're nearing profitability,
have triple-digit per year growth, and the latest investors get liquidation
preference that limits their downside.

EDIT: Fred Wilson has a good explanation about why "frothy" valuations make
sense right now: [http://avc.com/2014/03/the-bubble-
question/](http://avc.com/2014/03/the-bubble-question/)

~~~
wellboy
A sorry for the miscalculation, did that on the way out the door.

Just thinking how big the market is. According to
[https://www.quantcast.com/top-sites/US?jump-
to=110000](https://www.quantcast.com/top-sites/US?jump-to=110000) there are
110,000 sites with >10k monthly visitors, so I think that's the market of
which they probably can get 30k users max for which they can charge $100/month
on average: 30,000 _$100_ 12 = $36M/year revenue.

So for web, that's the cap it seems. According to
[http://www.appbrain.com/stats/android-app-
downloads](http://www.appbrain.com/stats/android-app-downloads), there are
200,000 Android apps that have >100,000 downloads, which probably equates to
10k monthly active users, with iOS apps that's 400,000. So this will probably
bring another $72M/year making it $108M revenue cap for Optimizely. So looks
like the money for Optimizely is in the app market.

With 300 employees at max that's a burn rate of $15M + $25M marketing + $10M
other costs, we got a profit of $58M = maybe $700M company, not bad.

Back of the envelope calculation, probably totally wrong, ok now back to work
:)

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beambot
I can guarantee their TAM is >$108M / yr.

I am involved in two websites that get a _lot_ more than 10k visitors / month.
Neither are listed in Quantcast. Using (crummy) traffic estimates based on
Alexa ranks, I'd wager that there are _at least_ 600,000 websites that would
qualify for your >10k monthly visitors mark.

But I suppose it's all a moot point: They convinced at least one VC to invest,
and that's all that matters. (Having used their product in the past, I
probably would've invested too given the opportunity. Their product is pretty
slick and saves a lot of time compared building your own A/B testing
framework.)

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matnewton85
Agreed. One of my sites is ranked 490,000 or so in Alexa. The worst month in
the last year was 165,000 visits.

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pud
I was a huge user of Google Website Optimizer. It was so easy -- you just put
Google's JavaScript in your site and it shows your users different versions of
the page.

When Google shut it down, I tried Optimizely a few times. It was so much more
complicated, I didn't have the time or skill to setup tests.

Optimizely- Congrats on the funding. I still want to use you. And maybe I'm
dumb, but I have trouble figuring you out. Anything I can do?

Anyone know of a simpler alternative to Optimizely?

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dsiroker
Sorry to hear that! Our goal is to make Optimizely so easy to use it just
works. Clearly we've failed in this case. I'd love your feedback on what we
could have done better to improve your experience.

FWIW, two weeks ago we launched our Optimizely Academy to help folks like you
go from zero to hero: [https://learn.optimizely.com/hc/en-
us](https://learn.optimizely.com/hc/en-us)

~~~
PhilipA
The thing is that, when you need an academy or getting people certified, your
product is too complicated to use.

~~~
gagaga
I hear sentiments like this a lot, but I don't agree. Many companies have
training on how to use Google Calendar/Drive properly. That doesn't mean these
products are too complicated.

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dublinben
>Many companies have training on how to use Google Calendar/Drive properly

Is this really a thing? I would be embarrassed if I couldn't figure out a site
as simple as Google Calendar/Drive. How should I take advantage of this?

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guiambros
Most comments here focus on the immediate revenue potential. But this is part
of a much larger ecosystem, that spends billions of dollars deploying
enterprise marketing platforms with Adobe, IBM, SAS, Oracle. Performance
Optimization is just one of the many areas in this space.

The enterprise marketing platform is an area ready for disruption. Few large,
expensive and slow players. Most offering clunky proprietary products, that
require a huge learning curve.

After (if?) Optimizely solidify presence in this space, they can move up the
food chain: tagging, re-targeting, DMP, personalization, campaign management,
content management, etc.

So far they're off to a good start. And worst case scenario, they'll be
acquired by Adobe and will become the new version of Test & Target.

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balls187
Congrats.

"Triple digit year-over-year growth in annual revenue since launching in
2010."

Is easily misleading without context.

I don't expect companies to divulge revenue numbers, but a company founded on
data driven insights for site content, could probably choose more appropriate
metrics to share.

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mikeyouse
From a blog post last year, you can calculate an absolute minimum;

March 2013 - "Double digit millions revenue run rate."

So a minimum monthly rate in 2013 would be ~$850k, so a minimum monthly rate
for March 2014 would then be $1.7M.

[http://blog.optimizely.com/2013/04/10/optimizely-
raises-28-m...](http://blog.optimizely.com/2013/04/10/optimizely-
raises-28-million-to-go-global/)

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tpeng
Random thought: Companies like optimizely have key data on its customers
(conversion rates) and it may be valuable to a VC to have a board seat /
access for the data alone. Not alleging any malfeasance here, just think it is
an interesting angle.

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r3m6
I am not sure why this got downvoted. Using cloud services for your a/b
testing can reveal key competitive information to the company. So trust is a
big issue. That is one reason why I try to keep everything inside GA.

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melindajb
One of the most important products to happen to marketers in a long, long
time. Congratulations guys! I love your product and find it incredibly easy to
use.

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Matt_Mickiewicz
Congrats Dan & Pete!

It's been amazing to watch the growth of Optimizely from seed stage to the
massive success story it is today.

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NewsReader42
Shame they can't get their website to work in FF 29...

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gustaf
Congrats Dan & Team! Amazing work

