Calacanis Archive

I feel for Mahalo founder and CEO Jason Calacanis this past week. He finishes his Launch conference (my recap), heads to the afterparty and probably gets 10,000 text messages because that was just about the time that Google announced their algorithm change. Assuming Jason wasn’t briefed by Google about the change, that really is pretty horrible timing and I wouldn’t wish that on anyone, even a guy from the B-line (I am D-line).

This afternoon Jason and Mahalo president Jason Rapp sent out a mass email noting that, based on the Google changes, they will be reducing Mahalo staff headcount immediately by 10%. Here are a few key points directly from Jason and Jason:

• (re: the google change) Despite those efforts, unfortunately, the Google changes have led to a
  significant dip in our traffic and revenue. It’s hard not to be disappointed since we’ve been spending millions of
  dollars on producing highly professional content.
• Today we have eliminated a handful of positions in the company (about 10%), and we’ve cut a number of non-essential services we provide internally. In addition, we are re-evaluating our freelance content
  production, pausing it in the near term and determining how to best produce the high-quality educational material we aspire to in the long run. We are not, however, diminishing our video production efforts.
• Interestingly, while the search side of Google has impacted us negatively, Google’s video unit (YouTube) continues to be our strong partner, encouraging us to ramp up our video production and publish even more of our expert video lessons with them.

What’s really interesting to me is that I remember when Mahalo first launched, Jason told me numerous times he didn’t care about Google because he was going to build loyal users who would just come directly to Mahalo (e.g. similar to how we just go to TripAdvisor to look up a hotel).

Continue reading “Mahalo Reduces Headcount by 10% After Google Algo Change” »

So the first Launch conference wrapped up yesterday and after watching the entire conference on Ustream, I wanted to share some thoughts on the startup conference. Overall I thought the conference was very well run and Tyler did yet another awesome job coordinating everything — I sure hope Jason pays him well and not just in Mahalo stock :)

My first very positive comment was that every single startup that presented had a useful concept. I didn’t see one Twitter fart app, not one social media ninja rockstar app, or anything built completely on Twitter. It was frankly a breath of fresh air. If you are a regular reader of CN, you know how I feel about the usefulness of a startup (heck I started one myself!).

Next, the live stream worked great and was free. I certainly hope DEMO will be streamed live and for free this season unlike their $250 fee to watch last season. If Launch, which gave away tons of free tickets, allowed the startups to present for free, charged up to $1,000 for a ticket could provide a free live stream, then how could DEMO not provide the same when they charge up to $2,995 per attendee ticket and charge the startups $20k to present? Why do I continuously push on how important it is that the livestream be available and free? Because people want to talk about the startups when they are presenting – the compounding of comments and chatter is critical – posting a video a day or two later kills the momentum completely.

Continue reading “Some Thoughts on the Launch Conference” »

Last month I discussed presenting at the DEMO and TC50 conferences later this year. In the comments, Techcrunch50 founder Jason Calacanis noted that one of the big differences between the two startup-infomercial conferences is that his Techcrunch50 offers $50,000 to the winner.

Now it appears DEMO has stepped up the prize pool bigtime by offering two $1 million dollar prizes. The prizes will be awarded to the best enterprise startup and the best consumer startup. The prizes are basically ad buys over the six month period following the conference.

Update 5:30PM: It appears that the total prize is $1 million, not two million as I previously noted. I am not sure if I got it wrong or if they changed it. I thought it read that two winners (one consumer, one enterprise) would each receive $1m.

Conference organizer Matt Marshall notes regarding the prize, “The campaign will include print advertisements, web banner placements, text link promotions, email newsletter promotions, and video ads. The package includes the development of creative content that is to be featured on IDG media properties – another huge value proposition to the winning companies.”

I assume the ads will be priced at the rack rate so the $1m is probably worth less had you bought the ads yourself and negotiated a better rate (probably 30% at best). No matter what, it’s good to see the winners get some publicity past the few posts they will get from the conference buzz.

How many of the companies that presented at either conference last year can you name? Can you name 10 of the 50 that presented at TC50? This huge ad buy should help two companies stay top of mind for at least six months and could give them a lift to build from.

There’s been a lot of talk the past couple of weeks about URL shorteners and the new DiggBar. Even Leah Culver, former partner to Kevin Rose on Pownce, has come out against the methods of the DiggBar. One of the issues with the DiggBar is that it "frames" the content of the site which can lead to a variety of issues. Daring Fireball has laid out his concerns with the DiggBar yesterday.

So what does Jason Calacanis, founder of Q&A service Mahalo, think about the concept of framing? Appears he hates it when Facebook does it but loves it when Digg does it.

Facebook:

Digg:

Mahalo CEO Jason Calacnis has posted an in-depth email to his huge private mailing list this evening to provide more details about the firings and changes at Mahalo today. While I can’t republish the email, I thought I would provide my honest thoughts on his comments.

Jason begins with today’s post from his blog. I’d have thought the post would have been better placed on the Mahalo blog. It’s important to speak to your customers more than anything.

He then explains that he still has 30 FT staff across 6 offices in California and more than 50 freelancers. In his interview last week in London with Intruders Jason stated that they have 100 FT plus 200-300 freelancers. Not sure which number is accurate.

I will agree with Jason that there’s nothing worse than having to look an employee in the face and telling them that they are no longer employed with x firm. It’s not something any manager ever wants to have to do. This part of his email is well worth reading.

Jason notes that most of the Mahalo reorg was handled while he was out traveling the world. He explains that he pushed his executives to come up with a cost-savings plan within two weeks which included five days to analyze and execute the plan. With 4 years of money "even if we never generate a penny" why was there a need to rush to a decision? Why not take the time to accurately look at the situation? I am still confused at how the economy is playing a role in today’s decision. From my perspective and to be completely honest, after reading his email, his blog post and the other reviews today, I get the sense that today’s announcement is a traditional business restructuring rather than directly due to the current economy.

Jason compares firing staff members with a sports team coach letting players go at training camp. This is really an unfair comparison. The people that Jason has fired/restructured are the people who built Mahalo and apparently put in their blood, sweat and tears. A fairer (but not accurate either) comparison would be a coach firing his/her offensive line the day before the superbowl.

He wants the company to have four years of runway with no income coming in — this was his goal with today’s restructuring. He was spending two editorial dollars for every technology dollar — this makes sense considering his vision is for a human network, not a computer network.

He goes on to explain that the people who work at home are significantly cheaper than full-time employees. Isn’t that usually how it works? So what cuts were there?

• Mahalo daily video editors are now contract employees – Jason doesn’t specify if these employees get any benefits at all
• They swapped their phone lines to save $1.5/month – although I thought this was done earlier this year?
• They rent out office space to other companies
• He won’t be traveling the world anymore – even though last week in Asia he said that Americans should travel outside the U.S. – 10-12x a year to be successful
• They have moved "aggressively" to a freelance workforce – this means no benefits, no stock. This is so different than everything I’ve heard from Jason to-date.
• We also learned that Jason likes to blog from his garden near his pool

Jason then shifts to revenues where he explains that they have "aggresively" started running Google AdSense. This is clearly noticeable as the ads mirror the content exactly. My gramma would never be able to tell the difference. Good to see Jason be upfront about the change here. He’s also working on partnership deals around content – if he can close 20% of them, it will help cut their spending by 10%. He ends by explaining that they are focusing on building revenue now – and I completely agree with this.

Jason doesn’t believe an end to the current financial situation is in sight.

He shares some points around executing the workforce reductions:

• do it all at once – I agree, pull the bandaid off at once versus slowly don’t sugarcoat it
• cutting salaries is typically worse than cutting headcount – I generally agree, large companies do this pretty often – fire the expensive workers and replace them with cheaper less experienced talent. Of course in today’s market
• you can grab top quality talent for a much cheaper price.
• give severance – i’d like to see him share what he did for his employees today. when they moved to freelancer status, did he pay out their stock options? this is where i’d like some answers.
• get everyone focused again – frankly my suggestion is to close the office for a day – let people clear the air – especially with today’s internet – all of his staff will be reading posts like crazy – let them clear their heads and take a deep breath.

I leave you with this… I’ve said since day 1 that for Mahalo to survive they have to move away from humans and more to technology. I continue this belief with today’s announcement. And just like I said in my previous post, if there’s anyone affected today by the job cuts at Mahalo (or anywhere else), drop me a line if there’s something I can help with. (don’t ask for money though, I have none to give)

Last week marked the apparent end of one man’s blogging career. Most believe that it is a hoax but I know that this individual would never use trickery or magic potions to get more traffic to his startup. This person has created a mailing list to more effectively communicate with his network. I can’t link to the mailing list because it was capped at 500 1,000 1,100. Steven Hodson has deciphered the email for the rest of us.

I wasn’t planning on posting about this topic but I just received a video from the "blogger king" at the "blogger information network" - apparently there is a program to actually effectively quit blogging. Anyway have a look below and you decide for yourself. The full email blast is located here.

Today at the Personal Democracy Forum in NYC, Huffington Post found Jonah Peretti ran through a presentation about how to make anything "go viral". I was able to capture the video on tape for ya’all and it’s embedded below. Jonah was actually outside of my visible range so just imagine him standing to the right. On stage you can watch Jason Calacanis play with his Blackberry during the presentation.

The video is 10 minutes long and the first 5 minutes are about how many awesome things Jonah has been a part of is so you might want to skip that part.