NYT: To Survive, Net Start-Ups Slow Their Metabolism >> Ogilvy China Digital Watch

Ogilvy China Digital Watch: "NYT: To Survive, Net Start-Ups Slow Their Metabolism"

Posted on October 28, 2008 by Kaiser Kuo | 1 comment

Filed in: Web 2.0, Venture Capital

Yesterday’s New York Times ran a good piece on how Internet start-ups are dealing with the onset of winter by “getting small, humble and thrifty,” and how lots of layoffs are happening among fledgling tech companies. The piece makes a very good point — that in the Web 2.0 age, there’s relatively fixed cost involved and it’s easy to pare down to a skeleton crew and survive a slump. They’re so good at keeping their burn low that, as one VC quoted in the piece says, it’s made the whole decision over pulling the plug problematic, as the VCs “may not have the plug in our hand.”

The list of companies who’ve cut staff just in the last two weeks, though, is depressing. Many are quite well-known start-ups, at least among those watching: Jason Calacanis’s social search site Mahalo, my favorite Internet music recommendation engine Pandora, SNS Hi5, music site Imeem, real estate site Zillow, visual search engine Searchme… and there are a couple of other very well-known companies like Loic Le Meur’s Seesmic which, as the story says, also went through a round of layoffs. (Presumably, Mahalo fired only people “who a"