
Optimizely to be acquired by Episerver - scootklein
https://www.bloomberg.com/news/articles/2020-09-03/goldman-backed-startup-optimizely-to-be-acquired-by-episerver
======
richardfeynman
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.

~~~
tptacek
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!

~~~
richardFINEman
I worked at Optimizely for 4 years and can tell you that pivoting to
Enterprise has been one of the best company decisions.

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

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.

This isn't to say that there aren't lots of problems with Enterprise sales and
that Optimizely didn't make tons of cultural mistakes in that pivot. But on
the core financials, Enterprise kept Optimizely afloat. The problem wasn't the
pivot to enterprise, but the trade-offs that were mismanaged along the way.
The path to enterprise was inevitable and correct.

~~~
richardfeynman
First off, love the username :-).

You argue that pivoting from self-serve to enterprise was one of the company's
best decisions. If that were true, Optimizely would be considerably more
valuable now than it was four years ago, which is manifestly not the case.

Moreover, if the self serve model was indeed fatally flawed, then it would not
be possible for anyone to build a profitable business serving this segment.
However, a competitor, VWO, showed that it is possible to build a large,
profitable business using this model.

Finally, let's say my prior two arguments are wrong, and the unit economics of
the self serve business were fundamentally flawed--an assertion I challenge--
the self serve business would still have been useful as a source for
attracting future enterprise customers. When Optimizely cut the self serve
plans, it also killed its largest source of enterprise deals.

~~~
richardFINEman
Richard, I appreciate your theoretical arguments. Consider me the applied
physicist who has actually seen the data. :)

On the valuation. Optimizely's pre-exit valuation rose in every VC round since
changing the focus of the business from SMB (Series B) to Mid-Market (Series
C) to Enterprise (Series D). The valuation of the exit took a hit for reasons
that were not the enterprise focus. I could say more here, but consciously
choose not to.

The self-serve model at Optimizely was certainly flawed. If VWO was able to
build it profitably, that's likely because their labor costs, being based in
India, are substantially lower than Optimizely's. Keeping a legion of
engineers funded in SF has very different unit economics than keeping
engineers funded in India.

Now on your last argument, that self-serve customers could acquire enterprise
accounts, I certainly agree. If that strategy were better executed, it could
have created a valuable pipeline. But the self-serve to enterprise funnel was
sorely lacking, and when self-serve was cancelled, the business benefited
financially and migrated everyone to the new pricing model for substantial
success.

Its easy to look at Optimizely's final fortunes and link that to the
enterprise approach, and I won't argue they're completely unrelated, but there
were very different factors that caused Optimizely to fold into EPi's
acquisition spree.

~~~
richardfeynman
Thanks for making these points. They seem less hyperbolic and more grounded
than your earlier claim ("it was one of optimizely's best decisions") and I
appreciate that change in tone.

You characterize my arguments as theoretical, but they are empirical.
Optimizely's valuation _didn 't_ increase after the decision to kill self
serve was made, and VWO _was_ able to build a successful business without
killing self serve.

Also, as you now agree, optimizely would have had a better source of
enterprise deals with self serve intact. That's important.

Stepping back, every SaaS business has issues converting self serve users to
enterprise. Fixing those issues takes hard work, which optimizely was not
willing to do. Similarly, every business has higher churn in monthly self
serve plans than annual enterprise plans. Fixing this takes hard work too.
Things were not unsolvable, optimizely simply had no appetite for solving
them.

To address your other points: 1\. I donbt that labor costs would have made a
difference, but say they would have. Was anything stopping optimizely from
reducing costs to have overseas development in india? 3\. Your comments about
the various foci at different rounds of funding is irrelevant. I'm not arguing
that building an enterprise business is bad, I'm arguing that killing self
serve was bad.

Ultimately, as Dan predicted in 2013, Optimizely died of indigestion rather
than starvation; the market was always there, and still is.

Hope this helps clarify my position, even if we still disagree. If you send me
an email, I'd be happy to help squash your skepticism about the $100k too.

PS. I don't think that killing self serve was the only thing that led to
optimizely's demise, but I do think it was a factor.

~~~
ajit_singh
"Optimizely died of indigestion rather than starvation" while it might be
true, not sure if Dan ever admitted anything close to that in public.

------
worldsoup
I interviewed for a marketing role at Optimizely back in 2013...I passed all
the interviews with the team and then had a final, short interview with the
CEO. He asked me a few basic questions and then asked 'if you only had 3 years
to live, would you work at Optimizely?'. I responded honestly and said no.
Said that I'd love to work here to help and grow the business, learn, and
further my own career but if I had only had 3 years to live I'd spend my time
differently. The hiring manager called the next day and said I would not
receive an offer and when I asked him if it was because the answer to that
question he said yes. That made it obvious they had a strange and not
particularly healthy culture...lucky for me as I ended up at a much more
successful early stage startup where I accomplished what I wanted to
accomplish.

~~~
dsiroker
Over the years I A/B tested each of my interview questions in order to better
measure what I was looking for. It sounds like you might have been asked an
early version of one of the questions I used to ask so sorry you didn't get
the "optimized" version. (there was a big difference in responses between only
3 years and 10 years to live)

Also, to clarify, I used to end my interviews with TWO questions: (1) if you
had 10 years to live, what would you do? [wait for answer] (2) if you had 10
years to live, would you take this job?

The things I was assessing in these questions were candor, intellectual
honesty, and passion. Sure, it would be great if people authentically were
passionate about taking the job if they had ten years to live. That was a tiny
minority of responses.

The only "wrong" answer to these question was when someone would answer YES to
the second question after clearly answering something completely different to
the first one. For example, if someone would say travel the world to #1 and
yes to #2.

The reason why this measured candor was because if someone could tell me to my
face during an interview they wouldn't take this job, then I knew they would
tell me to my face when something was broken in the company after I hired
them. I was looking for the exact opposite of what this thread implies I was
looking for. I didn't want ass kissers. I wanted truth tellers.

~~~
redshirtrob
Reading the op's post and your reply, I can only come up with two possible
conclusions:

1\. The op is lying about his experience.

He states he answered NO to question 2, which is what you claim to be looking
for. Unless his answer to question 1 was "Work for Optimizely" (which, I
guess, someone might say, maybe) then I don't see how you get a contradiction.
By your logic, he would have been a hire.

2\. The recruiter lied to him about why he was rejected.

Maybe everyone got a short sit down with the CEO back then and he took that to
mean he passed all the other interviews? Maybe something else didn't check out
and that was an easy way to let him down?

Anyway, if you're A/B testing, wouldn't you hire people regardless of their
answers and then assess their performance over a longer timeframe to determine
the efficacy of the questions and answers?

~~~
dsiroker
Not sure exactly what happened but I did personally interview the first
hundred employees so that means I probably interviewed him or her and would
have done so regardless of how the other interviewers felt about the
candidate. My interview feedback was treated like the rest and I rarely if
ever vetoed a hire if everyone else was unanimously in support.

And you are right, I did hire people regardless of their answers to some
questions and I would then assess how they turned out to figure out if my
questions were any good. I basically gave everyone I interviewed a pass on at
least one question even if they bombed it abysmally. Some of those folks
turned out to be our best employees so I learned to never hold one bad answer
against someone. It also gave me a dataset to improve my questions for the
next wave of candidates.

~~~
seanoliver
Of all the questions I've been asked in interviews over the course of my
career, this is the only one I can actually still remember to this day.
Partially because it's extremely unique. And partially because I was fairly
certain at the time, judging by the look on your face, that I'd completely
bombed it. (Also reading your explanation above, I now KNOW that I bombed it.)

Anyway, I'll attest to the fact that Dan at least didn't veto all candidates
purely on the basis of their response to this question (unless I was the
result of a massive clerical error).

Outcomes aside, I'm very thankful for my experience at Optimizely. My time
there was a major inflection point for me both personally and professionally.
I wouldn't be as effective in the workplace as I am today—nor would I have
some of my most meaningful friendships—had I not cut my teeth at 631 Howard —
thanks Dan (and Pete, if you're reading this too).

EDIT: Also considering the timeline and the role described in the OP's
message, there's a nonzero chance we were interviewing for the same role.
Small world!

------
jakemcgraw
Just kicked the tires on Optimizely for a site with less than a million MAU.
They wanted $50K upfront for one year. No monthly or quarterly billing
available. Went with Google Optimize instead, works fine for free. In the face
of that, very surprised Optimizely doesn't do month to month to get folks
started.

~~~
gingerlime
It's worse. They essentially kicked-out their existing self-serve customers in
the process. We were on the (at the time) silver plan, but when we were ready
to upgrade to gold, there was no gold, no silver, nothing... Just some super-
expensive and vague enterprise plan.

But there's a silver lining: we created and open-sourced Alephbet[0] - a
simple A/B testing platform together with a couple of backend options with AWS
Lambda/redis[1] and couldn't be happier :)

[0]
[https://github.com/alephbet/alephbet](https://github.com/alephbet/alephbet)

[1] [https://github.com/Alephbet/lamed](https://github.com/Alephbet/lamed)

~~~
js4ever
Thanks for this, also I love the name :p

~~~
myth_drannon
Actually it's a great idea to name your projects with Hebrew letters.
"Shinbet" sounds cool ;)

------
dsiroker
(co-founder of Optimizely here)

HUGE thank you to YC and the entire HN community for all their support over
the years. It was almost ten years ago that we launched here on HN. [1]

[1]
[https://news.ycombinator.com/item?id=1788634](https://news.ycombinator.com/item?id=1788634)

~~~
mh-
thanks for an amazing culture and experience at Optimizely, Dan.

~~~
joecasson
Ditto!

------
paraschopra
Dan, Paras from VWO here.

Congratulations for the acquisition. We've enjoyed competing with Optimizely
over last the last 10 years, and certainly learned a lot in the process.
Hopefully, that will continue even after the acquisition.

The way we look at things, experimentation as a market is certainly in an
early phase. The more complex the world becomes, the more necessary
experimentation becomes to understand what customers really want.

As an aside, it is true though that for experimentation to work, a company
needs to be ready for it. Their culture needs to support being proven wrong
and having patience to build momentum of wins over the long term. Any org with
a short term horizon will likely see experimentation as a cost without
corresponding returns. But companies that really see long term - think Amazon
- ground themselves in experimentation.

Of course, not every company can be Amazon but our belief is that more
companies will start realizing that there's no alternative to developing a
culture of experimentation. This is why we're excited about the market. For
us, at VWO, it still seems day 1 :)

------
whoisjuan
This sounds like a bad exit. From what I can tell the original Optimizely
space has been slowly becoming a more discrete area of progressive delivery,
rather than an industry on its own.

Many players have jumped into this space with their own A/B testing and
Feature Flags solutions as part of their total offering, many of those
offerings being free, open source or cheaper. Also potentially better in the
concrete tasks they enable. I doubt that Optimizely's feature flag offering is
superior to something more specialized like LaunchDarkly.

Also there are a couple of strong incumbents' solutions like Google Optimize
and Adobe Target and it's always hard to go against incumbents specially when
the incumbents are coming after you and not the other way around.

One clear problem for Optimizely in this space is that experience optimization
became a function of marketing departments through out the years but for a
while they were positioning themselves as a developer tool. This go-to-market
strategy opened a lot of opportunities for other players who saw a bigger
market when selling the same type of solution to Marketing Departments.

Maybe I'm wrong but it seems that they just stopped growing and have been
experiencing a lot of customer churn since this is likely an expensive product
with a hard to calculate ROI. They're probably still selling a lot but nowhere
near to the original investor expectations / close to becoming profitable.

~~~
TheBill
Google Optimize & VWO hurt them. Free, or low price, low friction won at scale
with smaller teams running 1-2 experiments or low level personalization.
Everyone I know who's going to high volume testing is either on a hosted CMS
that has this baked into their offering or JAMStack.

No one I know has deployed Optimizely since 15/16.

~~~
ssharp
Optimizely's pricing makes no sense for small teams but VWO and Optimize
cannot compete on features that start to become very useful as your
experimentation and personalization efforts increase.

Any roll-your-own experimentation platforms take considerable resources to
make accessible to those in the organization interested in using it (product,
marketing, etc.)

~~~
roasm
In my experience, I agree the core functionality (variant management, remote
config, etc.) is relatively small amount of effort compared to the interfaces
to make it accessible to those non-technical orgs, like you mention.

However, we found that those interfaces only allow very limited, shallow tests
and you very quickly outgrow them as an organization. In other words, once you
reach diminishing returns on button color and header text optimizations, you
start wanting to test deeper UI experiences and complicated user flows. At
that point, you have to involve engineering anyway.

When an organization has engineers who are motivated by business metrics, they
have no problem implementing shallow tests (like button colors) while working
on tests of the deeper UI experiences as well. And at that point, the non-
technical interfaces have little value.

~~~
ssharp
I wasn't really talking towards the WYSIWYG editors. Those are trash on all
platforms and fall apart quickly for all but the most simple tests.

Metric + page management, results analysis, segmentation, etc. all work better
in Optimizely than they do in other platforms.

------
roasm
A few years ago, we were a monthly customer of Optimizely for a few hundred
dollars a month. Reasonable for a startup.

Then they went to the annual cost of $30K+ upfront and ended all monthly
options. They had to move to high cost, high touch to compete with the
free/cheap offerings to stay in business. This acquisition suggests that
didn't work.

We ended up building randomization, remote config, and logging ourselves, and
did the analysis with our existing stuff.

------
bmmayer1
I used to work two desks over from Dan at the Obama campaign in Chicago in
2007, when he was developing and testing an early proof of concept of what
would become Optimizely. He was able to increase fundraising performance
significantly by doing (what would now be considered simple) A/B tests. He's
sharp and tenacious, identified a market ahead of its time and invented a new
product category.

Whether or not this is a "good" exit, it's a great accomplishment for Dan and
the team and can't wait to see what they do next!

~~~
dr_dshiv
Didn't they work on an educational game first? Or something about carrots and
sticks? I liked their story when I read about them ages ago.

------
rogerdickey
I remember meeting Dan, the founding CEO of Optimizely, at winter 2010 YC demo
day. I had just grabbed my name tag and was walking toward the building when
he stopped me outside to give me the pitch. He immediately struck me as a
smart, capable guy, but as a former software engineer I couldn't understand
why companies wouldn't just build A/B testing themselves. What did Optimizely
add? How was it defensible? Dan didn't answer the questions to my satisfaction
so I thanked him and moved on. As the years went by and I saw them raise round
after round, get great press, put up billboards, and build out a beautiful
office that I walked by at least once a week, I felt terrible for missing out
on the angel investment. I was a rookie investor (I think that was my first
YC) and chalked it up to my inexperience. I even tried to extract "lessons
learned" and apply them to similar investment opportunities. It feels
bittersweet to see things end this way, with probably no return for the common
and a haircut for investors. I had built them up and expected them to succeed
but I guess it's good to know I was right. Lessons: It ain't over 'til it's
over and vanity traction like press & billboards mean nothing. Don't build a
big company on a bad idea, it's a waste of time and money for everyone,
especially the founders & employees.

~~~
rvivek
BTW, I'm not sure if you would have expected them to get to $100m in ARR
either when you passed on them because you were skeptical of the market.
There's a lot between $1m to $100m ARR that can go wrong. In this case, I
don't think it was the market opportunity.

~~~
rogerdickey
Did they reach $100m ARR? If so that's impressive, a lot more than I would
have guessed.

------
martingoodson
In 2014 I wrote an article on why Optimizely's approach to AB testing was
statistically flawed [1]. I was working at a competitor so I needed to be a
bit circumspect.

It was discussed here:
[https://news.ycombinator.com/item?id=7287665](https://news.ycombinator.com/item?id=7287665)

I always wondered how they got away with it for so long.

[1]
[http://www.datascienceassn.org/sites/default/files/Most%20Wi...](http://www.datascienceassn.org/sites/default/files/Most%20Winning%20A-B%20Test%20Results%20are%20Illusory.pdf)

~~~
glangdale
It's a bit breathtaking how basic the statistics knowledge is to make this
critique (not complaining about the critique, mind you). I'm startled that
this was coming as news to anyone.

------
hitekker
Completely unsurprised.

Experimentation-done-right is too expensive and too ambiguous to sell as a
product. Every product experiment requires a complex set up, a lengthy running
period across a huge base of users, and then heavy analysis in order to
achieve statistical confidence over a specific feature's impact on a business
metric. That "confidence" is often represented by a subpercentage point that
may or may not be statistically significant. Fun problem for the data
scientist, plain hell for the PM.

In my company which uses experimentation for everything, each A/B test
requires _two weeks_ before the Product Manager can even see the results. Two
weeks of waiting for a confusing, contradictory dashboard that can't be taken
at face value, that needs careful, human analysis before it can be called a
"win".

That slowness is fine for high-traffic, high-risk & high-value lines of
business. But it's not fine when you're releasing feature that aren't just
optimizations.

Competitors like LaunchDarkly and Split.io have recognized that critical
difference, I think. They know that causality is expensive, and are
particularly aware that the fine line between feature release and metrics
impact is tied too heavily with a company's politics, i.e. it chafes against
the intuition of executives.

Instead, they offer experimentation as an add-on to their developer tools. You
can experiment if you need to, but it doesn't obligate you to do so.

That goal is much more realistic than the Optimizely's current goal: "helping
our customers win in a digital-first world".

~~~
socialleaf
Agree. Plus I'd also like to highlight how experimentation platforms/tools are
sold as 'conversion uplifter'. All orgs are looking for solutions to take
their conversion graphs up and to the right. And they are ready to pay hefty
sums for any tool that speaks to this motivation.

But then they are asked to wait! Wait for the concept to mature within the
org. Time being of critical importance most orgs end up getting frustrated as
what they initially started with doesn't hold true now. And when you already
have lots of money, it's easy to switch.

------
setgree
I count 18 sentences of fluff/framing before they say who is acquiring them.
Talk about burying the lede!

18 seems like an outlier, but for press releases I’ve read in the “we’ve been
acquired” category, I’d guess that the median is > 10\. Does anyone have
first-hand knowledge about why these statements are released in this teasing
way?

~~~
pmiller2
I'd say it's just a PR tactic to make such things seem like "big news," when,
in fact, such acquisitions are a fairly normal thing in the tech world. It's
hard to even buy that kind of publicity, so one has to take advantage of it
when one can.

------
andrewingram
The problem I had with Optimizely when it was the go-to solution, was that it
had a truly problematic impact on front-end performance due to the blocking
way its script was loaded and page variants introduced. In some cases page
loads were blocked by up around 5 seconds.

For obvious reasons it was tricky to run an A/B test just for testing the
impact of Optimizely's script itself. But the key issue is that all the
similar tools at the time (Optimizely not being the only culprit here) were
determined to not required developer effort, which led to poor overall
performance.

Then React et al came along and took ownership of the DOM, which meant adding
tools which also manipulated the DOM became even more problematic.

Fortunately tools like Launch Darkly and Split solve this problem in a better
way (high performance full-stack feature flags), even if it does mean
developer effort to add tests. Optimizely did eventually launch their own
version of this, but never really won back the developer mindshare.

Ultimately, it seems Optimizely enjoyed a few years of success, but a
combination of developers getting more concerned with performance and the
front-end world moving on to different architectures, seemed to lead to its
decline.

~~~
RRL
Back in 2015 I was pitching Optimizely internally. We already had an in house
barebones A/B testing tool. Once I got over that hurdle our CTO let fly how
his only experience using Optimizely had been a time when Optimizely went down
and took his site down with it. Optimizely eventually brought out their head
of product, and an army of senior engineers to convince him things were good
now. We signed an annual contract, but Optimizely was never added to any page
that was revenue critical/dependent on speed. Optimizely got their huge
contract, and in the end marketing and design got their lightweight A/B
testing tool, but we never realized the white paper level metrics jumps
because it was never used on any page that would actually have material
impact.

------
dennisvdheijden
Congrats Optimizely from you friends at Convert.com (A/B testing tool that
keeps the prices online)

------
alexhutcheson
Are there any good open source alternatives to Optimizely that can be self
hosted?

I'm aware of Wasabi[1], but I believe it's abandonware at this point.

[1] [https://github.com/intuit/wasabi](https://github.com/intuit/wasabi)

------
mrnobody_67
Another proof point that once the founder-CEO is replaced by a professional
CEO, it's game over more often than not. This happened in 2017 at Optimizely.

~~~
brentsabully
Happening right now at UserTesting. As the CMO would say: "yay!"

------
dr_dshiv
UpGrade [1] is an open-source A/B testing platform for education software. We
want to make it easy for education software companies to pilot new materials
and measure efficacy. We hope this can help optimize student outcomes and help
advance the science of learning. Would love any feedback -- we just launched!

[1] [https://upgrade-platform.org/](https://upgrade-platform.org/)

------
xnx
I would not want to be Optimizely and have to compete against a strong free
offering like Google Optimize.

~~~
BrianOnHN
I use Google Optimize. I wouldn't call the free offering "strong."

There is a limit of about six experiments at one time. Each experiment can
have up to 8 variants. And if you want more, then be ready to shell out
thousands per month (I forget the exact number, but that's the ballpark).

Overall, if I were to redo things, I'd probably be better off just using
Google analytics events.

Edit: that said, I'd never use a piece of bloatware like Optimizely for just
the split-testing feature. If your product would benefit from split testing,
then include it as a feature. It's not a "hard" feature/problem to implement
into just about any existing product that would benefit from it.

~~~
ssharp
Optimize can run five experiments at a time and it only lets you measure 3
metrics. Any other metrics need to be analyzed in GA and will almost certainly
end up sampled and unreliable.

------
suhail
Congrats, Dan! :)

------
jnrivasseau
Hello, Jean-Noel here, from Kameleoon (also a competitor to Optimizely, but
mostly serving European markets so far). First off, congrats to Optimizely /
Dan and co for the acquisition. For us Optimizely has always been a role
model, especially from the technical side of things (I'm the founder of
Kameleoon, but currently serving as CTO, so obviously I have a tech
background). Optimizely was (and still is, in many ways) a great platform. And
it did create (or at least, heavily helped develop) a whole market. However I
agree with Feynman's comment, the main problem with this company (and even
looking from aside, it was quite obvious for us) was that they raised way too
much money and made promises to their investors that were completely
impossible to fulfill. Basically, it looked like they wanted to be compared to
AirBNB, but their potential was honestly never the same, and this was quite
clear from someone with a little insight into the business. Because of that,
they started making mistakes after mistakes, burned way too much money and it
all went downhill.

They're not the only ones with that problem - almost all competitors / actors
in the field raised too much for the side of the market, from my opinion.
Dynamic Yield is probably the one that did the best at that game, with a great
exit when the hype was at its peak. But all the other ones are clearly in
trouble (even Optimizely exit, I am sure, is clearly not a success for their
investors, etc). The only actor that has a reasonable overall strategy is VWO
(somebody asked if they're were profitable - of course they are, since they
did not receive any funding, they have to. While Optimizely clearly never
was), because it stayed lean and avoided the pitfalls of over investments
(going to all continents on the planet, having 20 offices all over the world,
etc). Hats off to Paras for that. We try to stick to the same strategy at
Kameleoon, even if we had to raise a bit of capital. But you don't need to
raise $200 millions to have a great CRO platform - we proved this for a fact.

About the switch to Enterprise - anyone in this industry will tell you it was
absolutely necessary. Impossible to sell experimentation to SMB and expect to
be profitable, you need larger customers. Because contrarily to Mailchimp for
instance, a SMB customer paying $50 (or even $500) per month for a CRO
platform won't be able to operate it on its own and will churn. The problem
with Optimizely pivot to Enterprise is not the pivot in itself, it's how they
did it (I heard some horrors stories from people inside Optimizely, not sure
if they are true, but one thing is clear - it did not go well).

Anyway, it's still an exciting field, from the technical side of things, there
are still many innovations to be done and we hope to spearhead that at
Kameleoon :-)

------
designium
I hope the founder exited well. I remember working with him at Google when he
was the PM for Google Optimizer. Nice guy.

~~~
BurntBunting
I don't. The founders pushed people who trusted them to work hard and value
the company over their own needs. While the founders and their friends were
able to pull out equity, every one else was told that they had to wait their
turn, which never came.

If Dan and Pete were nice guys, they would have take care of the employees
that built their company. The employees wouldn't have been millionaires, but
they might be able to scrape together a down payment for a house. And not like
the mansion that Dan has, just something that would move them out of the fear
of rents increasing and losing their jobs.

They used to be nice guys. I don't wish ill towards them, but they do not
deserve a good exit with this.

~~~
hitekker
Wasn't Dan or Pete forced to step down on account of gross incompetence? I
recall there being some internal drama about their departure.

~~~
dsiroker
Haha, certainly no drama and no one forced us or even asked us to step down. I
wrote a blog post about it:
[https://link.medium.com/mHgtiQ3bu9](https://link.medium.com/mHgtiQ3bu9)

~~~
askafriend
[https://news.ycombinator.com/item?id=24368516](https://news.ycombinator.com/item?id=24368516)

If you don't mind answering, what's the strategy behind a hiring tactic like
the one in the link above? It seems cartoonish and not grounded in reality....

~~~
dsiroker
Sure, I just responded because you asked so nicely. :)

[https://news.ycombinator.com/item?id=24369766](https://news.ycombinator.com/item?id=24369766)

~~~
askafriend
Haha sorry for the snark but I really appreciated your follow up! We’re
thinking about hiring at our company and your framing was useful to read.

------
adeveloper870
Worked at a company that considered Optimizely for one of their possible A/B
solutions. We went with another vendor, but I then ended up writing an in-
house solution that took about a month [w/o analytics].

It is very easy to implement this in-house so long as you own the systems and
don't outsource [too much].

------
dataminded
I used their paid product once and failed to buy it two times after that.

They tried to move up-market and did it in an unreasonably difficult way in my
opinion. It was easier to do business with ORACLE and then Google. The sales
folks didn't listen, their proposals ignored our requirements, it was a mess.

I hope the staff got something.

------
kumarski
Maybe I haven't worked in tech long enough, but am I the only one who has
never heard of Episerver?

~~~
tootie
It's an old-school enterprise CMS. And a crummy one. It's done a pretty
remarkable job of staying relevant all things considered. The current market
leader in this space is Adobe who own AEM and bought Omniture years ago so
they can offer analytics and A/B testing in one bill of sale. Episerver must
be working to position themselves the same way.

Lot of big enterprises buy these kind of systems and pay through the nose for
them.

~~~
dwd
Episerver for a while was one of the main competitors of Sitecore in the
IIS/.Net Enterprise CMS space. Both were European (Swedish and Danish
respectively)

I built sites with both back in the late '00 and while Sitecore was marginally
better I don't miss working with either.

Adobe also bought Magento, while not as bad as Omniture, has it's own levels
of hell.

------
chundicus
As someone not too familiar with the ins and outs of acquisitions or IPOs...
is it unusual to get acquired after laying off a big chunk of your staff? Is
that an indicator that they probably accepted a lower valuation than they
would have before that layoff?

~~~
andrewingram
I worked for a startup that basically let 90% of its engineering team quit due
to low morale over the course of a year without making any effort to (a) stop
the exodus, or (b) replace them. When they exited about 6 months later, it
became pretty clear that it was intentional.

~~~
chundicus
Sorry for my daftness, but what is the incentive behind intentionally losing a
bunch of staff before 'exiting'? Just to reduce your cash burn?

~~~
namenotrequired
Mostly to get better profitability numbers to show to potential acquirers

~~~
andrewingram
Exactly. A small number of us were offered packages to incentivise us to stay
(ironically we still left), but the vast majority weren't. Which led us to
conclude that the plan was to just keep everything afloat long enough to sell.

------
jimbojones79
I worked at Optimizely for 2.5 years and left as recently as February. I'll be
grateful for the experience of selling experimentation into the European
market, even if Optimizely was on a flat trajectory. It is one of the most
difficult things to sell. The problem with experimentation is you are selling
hard work. Everyone says they want to be data-driven, but no one wants to do
hard work. No one wants to tell an executive he/she is wrong and their idea
sucks. No one wants to do the work of building a culture. It is akin to
selling religion.

I'll be most proud of the companies I sold to that then started doing internal
webinars on how to do hypothesis-driven product development and really
engaging in bottoms-up approach to experimentation. Those deals took 12-36
months to close, but you felt like you were changing how they ran their
business.

I see a lot of folks throwing shade on Optimizely here. I think that is
ridiculous. Not many companies can grow to 300 employees and over $75 million
in annual revenues. Even fewer companies get to IPO. Everyone's thoughts about
how Optimizely used to be worth more are BS. Valuations are perceptions of
product/market strength rather than the reality. We shouldn't be looking at
this as a failure. Rather we should look at this as a natural course of a
business finding its product/market fit.

Form a market perspective, Optimizely was hemmed in by big players like Adobe
and Oracle who bought competitors to round out their marketing suites. Adobe
and Oracle do not care about their experimentation products and will give it
away for pennies, so it isn't like they are driving innovation. On the low-
end, Optimizely created a bunch of fast followers. VWO, ABTasty and Kameleoon,
just to name a few copied not only the Optimizely tech but also their
marketing in some cases and then just sold for cheaper. Ultimately, the market
decided that Experimentation technology just wasn't super valuable (you still
need to generate the test idea yourself). The technology could be copied
easily and many people didn't care enough about it to change their cultures.

Outside of the market forces, Optimizely definitely made some mistakes. You
could make the argument that pricing and product development had issues in the
past few years.

I think those were not the core issues. I think the basic mistakes they made
were in execution. It is less sexy to talk about but ultimately if you have a
great product and a need in the market, you still can't win if you don't
execute properly.

Marketing execution was poor, Sales enablement was haphazard, Partnerships
with other tech firms or agencies changed almost daily, and culturally, the
organisation struggled to maintain the original culture it had around
transparency. It failed to realise that competitors had caught up to a bunch
of core functionality it thought was unique. It failed to market the new
features that were differentiable. It is easy to blame pricing or moving into
"enterprise" as the issue because that is what people see on the outside. I
think that is unfair. Many companies have done the same thing and it worked.
It is all down to execution.

Ultimately, I think Optimizely built a real market and culture in the tech
world that experimentation matters and data matters. The fact that you have a
ton of copycat companies prove that others see it as valuable as well (I
wonder how they'll fair in the future). Regardless of where it goes as part of
Episerver, it will have brought loads of people into the world of
experimentation, and I think that is a good thing for the world.

~~~
jnrivasseau
Agree with Paras there, VWO was not a follower, they started at the same time.
These things are actually funny - I even started Kameleoon before Optimizely
(early 2008), but we developed our visual editor first and did not apply it to
AB testing at the beginning. We made a (successful) pivot at the end of 2011
and have been focusing on CRO since, becoming competitors to Optimizely &
others.

Calling Optimizely's competitors simple followers is clearly an over-
simplification and a bias from the VC/SF crow indeed. As Paras pointed out,
every actor in the field had their firsts in the market (some of Kameleoon's
examples: our anti-flickering technology, our aggregation features in our
reports / data engine, our automatic cross-device history reconciliation or
our full ITP support). In many ways, Optimizely tech is now trailing behind
today.

However it's true that Optimizely (and to a lesser measure, VWO) did a lot
from the marketing side to develop the market, and we benefited quite a bit
from that. We're definitely grateful to them :)

------
neonate
[https://archive.is/Sz20v](https://archive.is/Sz20v)

------
dblooman
Any alternatives to Optimizely?

~~~
pkaura
[https://vwo.com/](https://vwo.com/) is closest and better in a lot of
aspects, check more here :
[https://vwo.com/compare/optimizely/](https://vwo.com/compare/optimizely/).
Full disclosure - I work for VWO

------
scottmcleod
Shot themself in the foot. RIP.

------
driverdan
Sounds like they're having financial trouble and needed to sell. I'm hearing
this will likely result in nothing for employees.

~~~
driverdan
If you're going to downvote please explain. Replies after mine with inside
information agreed with me.

