optify2Optify, a Seattle maker of marketing software that laid off its staff and hit the wall in September, has sold its assets and intellectual property in a fire sale. Steve Gerbsman of Gerbsman Partners, who was handling the wind down of the company, confirmed the asset sale in an interview with GeekWire.

He declined to offer other details, including the purchase price or the buyer. Former CEO Rob Eleveld said in an email to GeekWire that the company has “ceased operations and is shut down.” He did not respond to requests for comment on what happened to the company, which raised $2 million in funding last year and another $6.1 million from Madrona and Triangle Peak Partners in 2010.

The company’s Web site is no longer operational, and Madrona did not respond to a request for comment.

Former customer engagement specialist Alonso Chehade wrote in a recent blog post that the shut down was shocking and surreal.

“During a company meeting last week, at the end of one of our highest performing months, I received the crazy news alongside many of my co-workers that we were getting laid off,” Chehade wrote in September. “There was complete silence as the news (was) delivered very fast. Despite the financial uncertainty that comes with being unemployed, it was a heartfelt moment for all of us to learn that we had to let go of a great product and a great team.”

Customers also were surprised by the decision. On the same day that news of Optify’s troubles emerged, John Cofie, a partner at the London marketing firm Chesamel Communications, purchased the company’s software package for $750.

“I am astonished that they allowed this to happen,” Cofie told GeekWire. “Companies have certain obligations.”

Comments

  • Scotch

    This was not Madrona’s preferred exit strategy

  • WhizBangSolutions

    “Companies have certain obligations.” Not among them: staying in business when they aren’t profitable. Company viability should be part of the software solutions purchase process, amirite?

    • Guest

      The obligation refers to client compensation and transparency.

  • http://barryhurd.com/ barryhurd

    This is a sad way to go for any startup, especially a SAAS firm.

    Being a Seattle startup guy with a deep understanding of this specific space, my firm put together a very comprehensive list of all the Optify clients this past month and spoke with a number of them ranging from small shops to various small/mid-sized agency resellers (and yes, some of our clients wanted access to this list for outreach purposes.)

    We studied several hundred client sites and a few thousand prospect sites during a month long process where we learned some ‘no brainer’ items from those conversations:

    1- The obligation to shut down sales heading into a closure is the only ethical choice.

    2- Offering a migration period and assistance is critical.

    3- Enabling faithful employees to have a migration path is the right thing to do (not just the executive team.)

    4- Offering refunds/cancellations/support for a workable period is the right thing to do.

    5- Many of the platforms in this category are far better at Public Relations than they are at delivering a scalable product.

    Other insights:

    From a marketing and sales perspective this is a tipping point where one failure creates a domino effect that results in a cascading series of business failures.

    While I can’t dig into the legal requirements of a shutdown, the area of focus for Optify was to manage the lead funnel for SMB and small agencies. With the violent shutdown of Optify I’m positive there are dozens of businesses who relied on Optify’s platform to manage months of lead information that represented millions of dollars in future revenues and they lost a good chunk of that revenue.

    With all that said, my big question about the Optify sale is around customer data and lead information created by each business customer. If you have a CRM database of leads created by hundreds of small customers… who bought that list and what are they doing with it? What information did it contain? There are hundreds of thousands of lead data points collected by some reasonable companies (a few Seattle ones on my list) and those companies are probably wondering who just gained access to their lead list for the past 12-18 months of marketing efforts.

    • Scott Axworthy

      The last point is an important one. The Optify customer data belonged to Optify customers. No one bought it. The data was all destroyed in the shutdown of the hosted app and data center. Customers were given notice of the impending shutdown before it happened to have time to export their data.

Job Listings on GeekWork