Seattle-based Socrata, which develops cloud-based offerings for open data governments, has spent the last six months shifting its focus to work closer with larger government organizations. As a result, the company last week laid off 19 people, 16 of which were in marketing and sales, Socrata founder and CEO Kevin Merritt told GeekWire. Another eight to 10 left earlier in the year and were not replaced.
Socrata wants to be profitable by early next year, and that also played a role in the layoffs.
Merritt said Socrata has been providing data solutions to government organizations since 2009. Until recently, it has marketed itself to governments at various levels and sizes. But recently, Socrata narrowed its emphasis to what Merritt calls the “Government 500,” including federal agencies, some of the biggest cities like New York, Chicago, Los Angeles and Seattle, seven of the 10 largest counties, as well as 30 states.
The company has shifted from a broad-based demand generation model to an individual account-based business.
Socrata is working with larger governments to build robust publicly-available data sets as well as use data internally. Merritt said many governments have embraced open data, so Socrata doesn’t need as large of a sales staff.
“The need for Socrata to educate and evangelize to the market has diminished, and now it’s easier to have more of a direct consultative relationship with government organizations as we work with them to help them become more data-driven,” he said.
At one point, Socrata had 182 employees, and today it has 155. Merritt said Socrata is hiring, and the company will probably have approximately 170 employees by the end of the year. Socrata is shifting from having inside sales people at its Seattle headquarters to regional reps in important markets like Washington D.C., Sacramento, New York, Austin and Denver.
“We probably won’t be all that different in size, just slightly different in composition and make up,” Merritt said.
Socrata was founded as blist in 2007 and created web-based databases for small businesses. One of its early customers was the Obama campaign team, which used its platform to put campaign contribution data online. That led the company to look at its user base, and conclude that public data was its strong suit. There was a big market for cloud-based services that would save money for government organizations and help them become more transparent.
In three funding rounds, Socrata has raised approximately $55 million. Its major backers are Frazier Technology Ventures, Morgenthaler Ventures, OpenView Venture Partners and Sapphire Ventures.