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Optimizely to be acquired by Episerver

158 pointsby scootkleinover 4 years ago

30 comments

richardfeynmanover 4 years ago
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 &quot;hot startup&quot; lists, the Glassdoor reviews were 5&#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&#x27;s success was&#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&#x27;t even really understand it myself.<p>Th Episerver acquisition is indeed a bad exit, and I think I will lose &gt;$100k in stock I exercised (which is OK, I&#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&#x27;t enough. Success is not guaranteed. Your company&#x27;s leadership needs to be honest with itself, which Optimizely&#x27;s leadership was not. They need to be humble and work hard, which Optimizely did not do.
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worldsoupover 4 years ago
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 &#x27;if you only had 3 years to live, would you work at Optimizely?&#x27;. I responded honestly and said no. Said that I&#x27;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&#x27;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.
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jakemcgrawover 4 years ago
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&#x27;t do month to month to get folks started.
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dsirokerover 4 years ago
(co-founder of Optimizely here)<p>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]<p>[1] <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=1788634" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=1788634</a>
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paraschopraover 4 years ago
Dan, Paras from VWO here.<p>Congratulations for the acquisition. We&#x27;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.<p>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.<p>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.<p>Of course, not every company can be Amazon but our belief is that more companies will start realizing that there&#x27;s no alternative to developing a culture of experimentation. This is why we&#x27;re excited about the market. For us, at VWO, it still seems day 1 :)
whoisjuanover 4 years ago
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.<p>Many players have jumped into this space with their own A&#x2F;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&#x27;s feature flag offering is superior to something more specialized like LaunchDarkly.<p>Also there are a couple of strong incumbents&#x27; solutions like Google Optimize and Adobe Target and it&#x27;s always hard to go against incumbents specially when the incumbents are coming after you and not the other way around.<p>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.<p>Maybe I&#x27;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&#x27;re probably still selling a lot but nowhere near to the original investor expectations &#x2F; close to becoming profitable.
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roasmover 4 years ago
A few years ago, we were a monthly customer of Optimizely for a few hundred dollars a month. Reasonable for a startup.<p>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&#x2F;cheap offerings to stay in business. This acquisition suggests that didn&#x27;t work.<p>We ended up building randomization, remote config, and logging ourselves, and did the analysis with our existing stuff.
bmmayer1over 4 years ago
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&#x2F;B tests. He&#x27;s sharp and tenacious, identified a market ahead of its time and invented a new product category.<p>Whether or not this is a &quot;good&quot; exit, it&#x27;s a great accomplishment for Dan and the team and can&#x27;t wait to see what they do next!
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rogerdickeyover 4 years ago
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&#x27;t understand why companies wouldn&#x27;t just build A&#x2F;B testing themselves. What did Optimizely add? How was it defensible? Dan didn&#x27;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 &quot;lessons learned&quot; 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&#x27;s good to know I was right. Lessons: It ain&#x27;t over &#x27;til it&#x27;s over and vanity traction like press &amp; billboards mean nothing. Don&#x27;t build a big company on a bad idea, it&#x27;s a waste of time and money for everyone, especially the founders &amp; employees.
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martingoodsonover 4 years ago
In 2014 I wrote an article on why Optimizely&#x27;s approach to AB testing was statistically flawed [1]. I was working at a competitor so I needed to be a bit circumspect.<p>It was discussed here: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=7287665" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=7287665</a><p>I always wondered how they got away with it for so long.<p>[1] <a href="http:&#x2F;&#x2F;www.datascienceassn.org&#x2F;sites&#x2F;default&#x2F;files&#x2F;Most%20Winning%20A-B%20Test%20Results%20are%20Illusory.pdf" rel="nofollow">http:&#x2F;&#x2F;www.datascienceassn.org&#x2F;sites&#x2F;default&#x2F;files&#x2F;Most%20Wi...</a>
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hitekkerover 4 years ago
Completely unsurprised.<p>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&#x27;s impact on a business metric. That &quot;confidence&quot; 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.<p>In my company which uses experimentation for everything, each A&#x2F;B test requires <i>two weeks</i> before the Product Manager can even see the results. Two weeks of waiting for a confusing, contradictory dashboard that can&#x27;t be taken at face value, that needs careful, human analysis before it can be called a &quot;win&quot;.<p>That slowness is fine for high-traffic, high-risk &amp; high-value lines of business. But it&#x27;s not fine when you&#x27;re releasing feature that aren&#x27;t just optimizations.<p>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&#x27;s politics, i.e. it chafes against the intuition of executives.<p>Instead, they offer experimentation as an add-on to their developer tools. You can experiment if you need to, but it doesn&#x27;t obligate you to do so.<p>That goal is much more realistic than the Optimizely&#x27;s current goal: &quot;helping our customers win in a digital-first world&quot;.
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setgreeover 4 years ago
I count 18 sentences of fluff&#x2F;framing before they say who is acquiring them. Talk about burying the lede!<p>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 &gt; 10. Does anyone have first-hand knowledge about why these statements are released in this teasing way?
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andrewingramover 4 years ago
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.<p>For obvious reasons it was tricky to run an A&#x2F;B test just for testing the impact of Optimizely&#x27;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.<p>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.<p>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.<p>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.
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dennisvdheijdenover 4 years ago
Congrats Optimizely from you friends at Convert.com (A&#x2F;B testing tool that keeps the prices online)
alexhutchesonover 4 years ago
Are there any good open source alternatives to Optimizely that can be self hosted?<p>I&#x27;m aware of Wasabi[1], but I believe it&#x27;s abandonware at this point.<p>[1] <a href="https:&#x2F;&#x2F;github.com&#x2F;intuit&#x2F;wasabi" rel="nofollow">https:&#x2F;&#x2F;github.com&#x2F;intuit&#x2F;wasabi</a>
mrnobody_67over 4 years ago
Another proof point that once the founder-CEO is replaced by a professional CEO, it&#x27;s game over more often than not. This happened in 2017 at Optimizely.
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dr_dshivover 4 years ago
UpGrade [1] is an open-source A&#x2F;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!<p>[1] <a href="https:&#x2F;&#x2F;upgrade-platform.org&#x2F;" rel="nofollow">https:&#x2F;&#x2F;upgrade-platform.org&#x2F;</a>
xnxover 4 years ago
I would not want to be Optimizely and have to compete against a strong free offering like Google Optimize.
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suhailover 4 years ago
Congrats, Dan! :)
jnrivasseauover 4 years ago
Hello, Jean-Noel here, from Kameleoon (also a competitor to Optimizely, but mostly serving European markets so far). First off, congrats to Optimizely &#x2F; Dan and co for the acquisition. For us Optimizely has always been a role model, especially from the technical side of things (I&#x27;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&#x27;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.<p>They&#x27;re not the only ones with that problem - almost all competitors &#x2F; 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&#x27;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&#x27;t need to raise $200 millions to have a great CRO platform - we proved this for a fact.<p>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&#x27;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&#x27;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).<p>Anyway, it&#x27;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 :-)
designiumover 4 years ago
I hope the founder exited well. I remember working with him at Google when he was the PM for Google Optimizer. Nice guy.
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adeveloper870over 4 years ago
Worked at a company that considered Optimizely for one of their possible A&#x2F;B solutions. We went with another vendor, but I then ended up writing an in-house solution that took about a month [w&#x2F;o analytics].<p>It is very easy to implement this in-house so long as you own the systems and don&#x27;t outsource [too much].
datamindedover 4 years ago
I used their paid product once and failed to buy it two times after that.<p>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&#x27;t listen, their proposals ignored our requirements, it was a mess.<p>I hope the staff got something.
kumarskiover 4 years ago
Maybe I haven&#x27;t worked in tech long enough, but am I the only one who has never heard of Episerver?
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chundicusover 4 years ago
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?
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jimbojones79over 4 years ago
I worked at Optimizely for 2.5 years and left as recently as February. I&#x27;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&#x2F;she is wrong and their idea sucks. No one wants to do the work of building a culture. It is akin to selling religion.<p>I&#x27;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.<p>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&#x27;s thoughts about how Optimizely used to be worth more are BS. Valuations are perceptions of product&#x2F;market strength rather than the reality. We shouldn&#x27;t be looking at this as a failure. Rather we should look at this as a natural course of a business finding its product&#x2F;market fit.<p>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&#x27;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&#x27;t super valuable (you still need to generate the test idea yourself). The technology could be copied easily and many people didn&#x27;t care enough about it to change their cultures.<p>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.<p>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&#x27;t win if you don&#x27;t execute properly.<p>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 &quot;enterprise&quot; 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.<p>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&#x27;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.
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neonateover 4 years ago
<a href="https:&#x2F;&#x2F;archive.is&#x2F;Sz20v" rel="nofollow">https:&#x2F;&#x2F;archive.is&#x2F;Sz20v</a>
dbloomanover 4 years ago
Any alternatives to Optimizely?
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scottmcleodover 4 years ago
Shot themself in the foot. RIP.
driverdanover 4 years ago
Sounds like they&#x27;re having financial trouble and needed to sell. I&#x27;m hearing this will likely result in nothing for employees.
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