Startup depression brings job cuts to Mahalo

October 22, 2008 | Anthony Ha | Comments |

Tech entrepreneur Jason Calacanis announced today that his “people-powered search engine” Mahalo has laid off slightly less than 10 percent of its staff.

By making the cuts, Mahalo can extend its “runway” to profitability, which is necessary with the economic downturn and the resulting disappearance of ad dollars. Now the company could keep going beyond 2012 even if it doesn’t bring in any ad revenue, Calacanis writes.

Mahalo’s search results are created by employees, rather than automatically generated, and a recent redesign made the site more news-oriented. Traffic seemed to be growing fast at the beginning of the year. And although Compete shows that growth has flattened, Calacanis writes that the site gets 4 million unique users each month, “double where we thought we would be at this point.”

A few weeks ago, Calacanis (who will be speaking at our roundtable on surviving the downturn) published a much-discussed article about “(the) startup depression,” in which he predicted that 50 to 80 percent of venture-backed startups will either shut down or go on life support in the next 18 months. Even though he saw the downturn coming, Calacanis now writes, “It’s much worse than I thought it would be,” and tells those laid off, “I’m sorry that you’ve got to bear the burden of my inability to better prepare.”

Next Story: Imeem makes cuts, may be looking to sell
Previous Story: Video games not just for nerds anymore, IGN reports

Bookmark and Share

Tags:

Photo of Anthony Ha

About the Author, Anthony Ha

Anthony is VentureBeat's assistant editor, as well as its reporter on enterprise technology, cloud computing, and tech policy. Before joining VentureBeat in 2008, Anthony worked at the Hollister Free Lance, where he won awards from the California Newspaper Publishers Association for breaking news coverage and writing. He attended Stanford University and now lives in San Francisco. Reach him at anthony@venturebeat.com. You can also follow Anthony on Twitter.

  • Smart!! Keep the burn rate under what the average bad economy projection is. The cockroach theory.

    Meanwhile back at the Bat Cave, we here at MarkTend are LOOKING for people!!!! So, if anyone knows of several ADD trademark lawyers with software skills (no, knowing me doesn't count for one) tell them to drop on by and say Hi.

    Cheers,

    Michael Kassing
    MarkTend.com
  • Hey, well that's good to hear.
  • As employees are shown the door, an employer is wise to hang onto their e-mail records. --Ben http://legal-beagle.typepad.com/wrights_legal_beagle/2008/10/retain-e-mail-of-former-employees.html
  • I kinda hope that former Mahalo employees aren't reading about their layoffs on VentureBeat, but hey, fair point.
  • Is there anyone here who will admit to using this lame service?

    Would anyone offer to pay for a Mahalo Pro service, Jason has always said he would pay for a Pro Twitter account.
  • Apparently 4 million people would?
  • That won't scale Mahalo