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.”