by scootklein on 9/3/20, 4:08 PM with 183 comments
by richardfeynman on 9/3/20, 5:18 PM
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.
by worldsoup on 9/3/20, 8:28 PM
by jakemcgraw on 9/3/20, 4:55 PM
by dsiroker on 9/3/20, 5:47 PM
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]
by paraschopra on 9/4/20, 4:29 AM
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 :)
by whoisjuan on 9/3/20, 4:50 PM
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.
by roasm on 9/3/20, 5:01 PM
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.
by bmmayer1 on 9/3/20, 5:54 PM
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!
by rogerdickey on 9/3/20, 9:21 PM
by martingoodson on 9/3/20, 5:44 PM
It was discussed here: 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...
by hitekker on 9/3/20, 5:57 PM
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".
by setgree on 9/3/20, 4:58 PM
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?
by andrewingram on 9/3/20, 6:05 PM
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.
by dennisvdheijden on 9/3/20, 9:35 PM
by alexhutcheson on 9/3/20, 9:00 PM
I'm aware of Wasabi[1], but I believe it's abandonware at this point.
by mrnobody_67 on 9/3/20, 6:28 PM
by dr_dshiv on 9/3/20, 6:06 PM
by xnx on 9/3/20, 4:44 PM
by suhail on 9/3/20, 7:35 PM
by jnrivasseau on 9/4/20, 11:46 AM
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 :-)
by designium on 9/3/20, 5:10 PM
by adeveloper870 on 9/3/20, 8:05 PM
It is very easy to implement this in-house so long as you own the systems and don't outsource [too much].
by dataminded on 9/3/20, 5:36 PM
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.
by kumarski on 9/3/20, 7:44 PM
by chundicus on 9/3/20, 4:56 PM
by jimbojones79 on 9/4/20, 9:43 AM
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.
by neonate on 9/3/20, 5:49 PM
by dblooman on 9/3/20, 10:08 PM
by scottmcleod on 9/4/20, 1:24 AM
by driverdan on 9/3/20, 4:16 PM