optify2What’s up at Optify?

From what we’re hearing, the company is on its last legs. Multiple sources informed us on Friday that the company — a maker of inbound marketing software — laid off a number of staffers in advance of a closure.

Chief Marketing Officer Doug Wheeler declined to comment, referring us to CEO Rob Eleveld. Eleveld did not return requests for comment.

Optify raised an additional $2 million in financing last summer, cash that came in just a few week after Eleveld joined as CEO.

Rob Eleveld
Rob Eleveld

We’ve heard from two sources that Optify is in the process of closing up shop. Several employees were laid off this week, and a skeleton crew is remaining to keep things operating, presumably in hopes of an asset sale. A third source told GeekWire that the company’s staff is being let go as part of a sale in which the acquiring company is not keeping the staffers.

Optify was founded in 2008 by Brian Goffman and Erez Barak, and it was backed by Madrona Venture Group and Triangle Peak Partners. It raised a $6.1 million round in 2010, at the time saying that it was tracking more over 100 million Web pages per month in an effort to find new business leads for customers.

The company issued two press release in the past month, and it updated its blog as recently as August 28.

We’ll continue to follow the story, and provide updates on GeekWire as we hear more.

Comments

  • Thomas R.

    Great article John. Geekwire has done a great job on finding these shadow layoffs that aren’t getting much press anywhere else.

    Seems to be a pattern of these shadow layoffs/closings recently. Contour comes to mind and a few others. Any analysis of why now? Are these companies just all reaching the end of their runway at the same time?

    • johnhcook

      Thanks. I don’t think two or three companies laying off staff makes a trend. Companies naturally run out of cash or runway or prospects or momentum, and so it is natural to see churn, especially in the high risk startup ranks.

      I can’t say we’ve spotted a bigger trend. But we will be watching for bigger potential fractures in the tech market. Thanks again for tuning in.

    • Signals

      Seriously worth investigating. Optify was #57 and Contour was #17 on the Geekwire 200. Perhaps the ranking factors need to change…

  • boom

    2 million just last year? that was fast. it looks like the CEO has actually been there since early 2012. maybe dig deeper, john. brian goffman seems like a smart, connected guy and now at LinkedIn. this was a great company a couple of years ago. what happened? who is this CEO and what is his history? what does madrona think?

    • Dig Deeper

      I am pretty sure that 2 Million dollars was only supposed to act as life support. The old management drove the company in the wrong direction with a service focused model in the seo industry. As we can see from Moz, seo is something most companies are shifting away from. The new managements direction was strong and if there were more time could have led to a strong technology aquisition… unfortunately it appears that it did not take long for the debt of the old management to catch up to a company trying to pivot.

      • ANGRY_ANGEL

        I DOUBT IT.
        EXPERIENCED BOARDS (AND ceo’s) DON’T LET TINY LITTLE COMPANIES ON LIFE SUPPORT WASTE 2 MILLON DOLLARS MORE OF GOOD INVESTOR MONEY OVER JUST A YEAR.

        • Dig Deeper

          They do when a new focus shows promise and when major acquisitions happen in the new market. This sounds to me like an acquisition fell through and a debt was called and the VC would not extend that life support. Classic case of a company that did not figure it out until it was too late.

          • Deep Horizon

            That sounds elaborate. So, the company figured it out but was too late?? Same board?

          • Bill

            $2 million is not a huge amount to burn through in a year. They brought in a good CEO and some experienced management people. But looks like they could not turn it around fast enough. Not surprising. The SEO space is crowded, difficult and not terribly financeable if you lack traction.

            Also, a lot of times those financing totals include previously advanced bridge loan money. It would not surprise me if the $2 million included $500k in previously advanced money.

          • former Optify employee

            You couldn’t be more right…I know…I was there

    • Anthony P

      The new CEO was not the problem.

      On the contrary, Rob Eleveld made great strides in turning the company around. It’s been many months since I worked there but from what I can gather it simply came too late.

      Both Rob and Chris Hundley should be commended for what they were able to do at Optify in the time frame afforded them.

  • yikes

    Yes. Would love to know if there’s a common thread or more to the stories

    What mistakes did they make?

    Will other companies be effected?

  • Thomas Franklin

    madrona usually very good at getting money back from companies that go under….did they in this case?

  • http://barryhurd.com/ barryhurd

    Great catch. Sad to see another digital platform wither away.

    While Optify had some interesting tools, they were hardly a replacement for a professional on-hand. It isn’t all that bad, but at the same time you can only bundle so many things together and be *good* at some of them. I could never figure out what the ‘sweet spot’ was and couldn’t recommend the tool at the price point.

    As an SEO professional with plenty of experience, I found multiple cases where Optify just gave automated recommendations that were simply wrong (I ran several tests on sites owed by my firm and some client sites.) As Google evolved and continued to roll out ranking changes faster and faster, I have a feeling the gap just got bigger and bigger (automation for SEO/Social usually leads to poor outcomes.)

    The e-mail and lead functionality didn’t have that same problem (much more consistent business trends) and Optify seemed to stay on top of those benefit statements much better. If they had narrowed in and focused on one or two components I feel they would have done much better.

    I think the nail in the coffin for them was a variety of issues: pricing changes, development turn-over, varying agency pricing, etc. Bundle that against a huge wave of competition and you have a recipe for disaster.

    • http://www.branddigital.net scottfasser

      As a former employee at Optify, I know there is some great technology there. I think part of the issue is getting out of the SEO box and communicating the full value of the suite and platform. As a platform, more money was needed to both improve the SEO component while adding the inbound features they added: email, landing pages, visitor intelligence, etc. The platform strategy is an expensive one. Good people too.

      • makingfunofyou

        This is a great point. It’s exactly why Hubspot bailed on the “Email is Dead” mentality. Inbound is great, but a combination of the two is better. Outbound as you noted with email, LPs, visitor tracking and more is more complete and give a marketer the ability to better close the loop and create and drive behavior with interest created by inbound. The opposite is true as well.

  • Dig Deeper

    Has anyone checked out the latest blog post? “The Board of Directors of Optify, Inc., have made a strategic decision to maximize value of the assets and Intellectual Property of the company. The Board of Directors have retained Gerbsman Partners to solicit interest for the assets and intellectual property through Gerbsman Partners proprietary “Date Certain M&A Process”. “

    • http://barryhurd.com/ barryhurd

      I read the post about the M&A process. Multiple clients have contacted me about it (mostly because we knew them over the years) and it seems things are going downhill.

      A public statement about optimizing assets is pretty funny coming from a x-company that optimizes things.

      • makingfunofyou

        It’s time for people to start looking at other options.

  • http://www.Net-Results.com/ Michael Ward

    Tough times.

    I’ve penned an open letter to the customers and partners of Optify. Please have a look. http://bit.ly/18F03BW

    If any former employees are looking a place to land please get in touch.

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