Category: Coverage

Sequoia RIP Good Times + Jive’s quick response = Belated ink in The New York Times

Jive SoftwareLast October, Sequoia Capital‘s “RIP Good Times” was the bubble-bursting presentation heard around the startup world. And given that one of Sequoia’s portfolio companies happened to reside in our backyard—Portland-based Jive Software—we all knew full well that the bubble-bursting was going to be happening close to home.

It came in the form of layoffs for the young—and arguably successful—company.

I first heard about the Jive layoffs from Chris Kalani, one of the employees who was let go. Then, TechCrunch picked up on the Jive layoff story and things started to snowball. Unfortunately, the rapid escalation and swirling confusion seems to have precluded the real story from making it to the light of day.

Until now.

Yesterday, The New York Times brought a new perspective—and some much needed detail—to the the Sequoia and Jive story in an article entitled “Start-Up Gets Course in Survival.”

In the piece, we finally get a glimpse into what happened last October. And how those changes impacted one of the most successful startups in the Silicon Forest.

The changes Jive has made since the Sequoia meeting illustrate the ways in which young technology companies have slashed costs and narrowed their focus in an effort to stay alive. “Jive is the poster child. They nailed it,” said Jim Goetz, the Sequoia partner who is on Jive’s board. In the quarter ending in March, Jive booked higher revenue than any quarter in its history and plans to start hiring again.

We also get some insight from CEO Dave Hersh about the actual numbers of employees who were let go and why.

Seven days after the Sequoia meeting, Mr. Hersh laid off 25 of Jive’s 150 full-time employees and several contractors. They included underperforming salespeople and three executives who lacked the skills to build a company past the start-up phase, Mr. Hersh said. He scrapped an instant-messaging project and let go of the engineers on the team.

That same afternoon, he called the remaining employees to the office’s open meeting space that Jive calls “Whoville.” Mr. Hersh first put up a slide with the names of the laid-off employees. He figured the remaining employees would not look around the room wondering who was missing and would thus concentrate on what he had to say. He detailed everything the company had done wrong. He borrowed from Sequoia’s presentation and told the staff that Jive needed to conserve cash, make swift and deep cuts and invest based on results instead of ahead of them, as they had when they overhired.

Finally, the Gray Lady looks into some of the changes the company made to bring in experienced talent to help the company improve its course.

In January, Mr. Zingale brought on John McCracken, who had been his vice president of sales at Mercury. Mr. McCracken, who is known inside Jive as Johnny Mac, went to work overhauling Jive’s haphazard sales process. Jive’s strategy had always been to try to sell software to anyone who called. Mr. McCracken considered it a waste of money to chase customers who did not really want Jive, especially as the recession made software a much harder sell.

Salespeople were instead trained to grill potential customers with questions about their budgets and goals and turn away customers that did not fit. “One of the best things you can do as a business is to learn to say no,” Mr. Hersh remembers Mr. McCracken telling him.

As painful as it may have been, cutting early and cutting deep seems to be having a positive return for Jive—and their investors.

Given that Jive had the ability to lead by example when it came to Sequoia’s advice, I sincerely hope the next “lead by example” moment for the company is continued success and a clear path to bigger and better things. Because that’s an example I’d love to see all of the other startups here in the Silicon Forest follow.

(Hat tip Nino Marchetti)

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Well worth the read: The Oregonian’s coverage of the Winter Coders’ Social

It’s not often I get the chance to sing the praises of The Oregonian, but the coverage of the Winter Coders’ Social is exactly the kind of mainstream coverage this whole Portland open source community deserves.

Because much of the programming work in Portland is of the freelance or consulting nature, gatherings such as these are good for getting job leads or for simply taking a break from staring at a computer screen. But competitive Silicon Valley this isn’t. Here at CubeSpace, partygoers never get more aggressive than wearing shirts to advertise their preferred programming language — “Perl Mongers” or “Ruby Brigade.” And once the party ends at 10 p.m., plans are made to head up the street to Aztec Willies for another beer.

Silicon Florist favorites Calagator, Ward Cunningham, Selena Deckelmann, Audrey Eschright, Igal Koshevoy, and Bart Massey are all mentioned.

“The rate of change can drown you,” Eschright says. “You have to stay on top of things and get involved. Be a co-producer. Technology needs to represent who you are.”

As I’ve mentioned before, this is exactly the kind of coverage people have been asking me to pursue—shedding more light on the activities of the open source development community and user groups in the area. I’m glad to see The O beating me to the punch.

Grab a cup of coffee—or beverage of your choice—and take few minutes to read “Geekathon potlucks unite computer herd.”

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