Exit interview: Jaiku's Jyri Engeström Apr 26 2011
20 comments Latest by Scott Shattuck
“Jaiku was not much more than a year old when we were acquired. It was like hitching a ride on a firecracker!” says Jyri Engeström, co-founder of Jaiku.
“I poured my heart and soul into designing the service with our small team,” he says of the microblogging tool similar to Twitter. “As a sociologist I was convinced microblogging had the power to change society (see Egypt) — and I thought we would keep building the company for a long time. But we didn’t anticipate usage would explode so fast. Our back end had scaling issues, and our mobile client was for Nokia’s Symbian phones, which turned out to be an impossible platform to develop for.”
So in October 2007, Jaiku agreed to a sale to Google (rumored purchase price: $12 million).
At the time, Engeström (right) and co-founder Petteri Koponen wrote, “Our engineers are excited to be working together [with Google] and enthusiastic developers lead to great innovation. We look forward to accomplishing great things together.” Google Product Manager Tony Hsieh wrote, “We’re excited about helping drive the next round of developments in web and mobile technology.”
A time of excitement
Looking back, Engeström remembers the excitement of those days. “We joined Google with the assumption we’d build a new, more scalable service that would be tightly integrated with a small project called Android, which I thought was the best thing to happen to the mobile industry and was led by Andy Rubin, who had the cojones to take over the world,” he says.
“At the time, most people still thought microblogging was a passing trend: superfluous status messages a small population of geeks texted to each other on their Sidekicks and Treos. I was convinced microblogging was the defining social innovation of the decade, and that it would become ubiquitous with the oncoming age of smartphones; so it was exciting to think we could leapfrog to a completely different scale and have Google’s near-infinite engineering resources behind us to meet the exploding demand.”
Unique visitors at Twitter and Jaiku back in 2007. (Source: VentureBeat)
Industry insiders also felt the prospects for the collaboration were bright. RWW’s Marshall Kirkpatrick wrote, “With easy group creation, RSS import and threaded conversation, amongst other features, Jaiku is probably a superior service to Twitter.” A Softpedia piece said, “One thing is sure: the Jaiku products will be improved a lot.” Even Biz Stone, cofounder of Twitter, had kind words for the deal: “Those guys have a keen grasp of mobile, and it’s probably a good fit for whatever Google’s cooking up.”
Closed to new users
But after the purchase, Jaiku was closed to new users and quickly slipped into “the Google black hole,” according to reporter Farhad Manjoo. Three months after the acquisition, signups were still closed. Engeström wrote on the company blog: “To be honest, a lot of our time in the early going was spent on getting to know Google.”
David Lawee, the Google Vice President in charge of acquisitions, told Manjoo that moving a new company onto Google’s systems takes 3-6 months and enables scaling. But problems continued after that time frame for Jaiku. After ten months, Jaiku was still closed to new users and existing users were complaining it was too slow. Engeström responded, “We feel the short term pain, too.” All the while, Twitter was gaining traction.
Then, in January of 2009, Google’s Vic Gundotra announced changes to Jaiku: “We are in the process of porting Jaiku over to Google App Engine. After the migration is complete, we will release the new open source Jaiku Engine project on Google Code under the Apache License. While Google will no longer actively develop the Jaiku codebase, the service itself will live on thanks to a dedicated and passionate volunteer team of Googlers.”
But nothing much really happened after that. The site is still up but its blog hasn’t been updated since 2009. The About page says, “The service is maintained by volunteer Google engineers on their spare time.”
Splintered
Engeström’s view of the open source move now: “Jaiku was open sourced and put on life support so we could focus on building a new product. I reported to Vic Gundotra who had recently joined as the VP of Developer and Mobile. Vic was a superb boss — his response time on email was under 5 minutes — and he is widely recognized as an amazing leader, but at the time he had minimal bandwidth for social, because he was very focused on building mobile advertising into a billion dollar business for Google (which he did).
"I quickly found my job very different from being a startup founder, because a Google social graph and activity stream touched every existing product from Search to Gmail to Maps, and a large number of influential people weighed in, who did not look at it from the perspective of building a tightly integrated whole."
He continues: “In the end, what shipped was splintered into features of existing products: the activity stream is a feature of Gmail (Buzz), the mobile client is a feature of Mobile Maps (Latitude), and profiles is a feature of Search (Google Profiles). Members of the original Jaiku team, myself included, eventually left Google because we were all frustrated by these events.”
Lawee admitted to Manjoo that this sort of splintering occurs, but he argued this counters the idea of Google as a black hole. The gist of his view: Even if acquired companies wind up shuttered, they still have an impact on other Google services. Measure Map winds up in Google Analytics, for example. (Lawee did not respond to an interview request for this piece.)
A screenshot of Jaiku in 2007, when it was acquired. (Source: Mashable)
Lessons learned
Engeström sees lessons on both sides of the deal. “It shows how hard it is for a company that starts with a product, a way of doing things, and a culture, to change when the world around them changes,” he explains. “Google rightly saw social coming fast in the rear view mirror, but even with the acquisitions, 20% time, etc., it has been hard for them to change who they are.”
Engeström feels that being a small fish at Google doomed Jaiku. “I personally learned a huge lesson, which was that being acquired by the market leader can be a kiss of death to a startup. If the acquirer is at the height of their power and you are still regarded as small and insignificant, they will find it incredibly difficult to change their ways — even if they are the smartest people in the world and your product represents a disruptive force to their business in the long run.”
Still, he feels optimistic about the start-from-scratch possibilities that the internet provides. He’s now founder & CEO of Ditto, a mobile startup for sharing what you’re up to and exchanging recommendations about restaurants, movies, and other activities. He says, “The beauty of the internet ecosystem is that you can start over, and rapidly create something that totally outdoes what everyone just a short while ago talked about as the be-all and end-all (think Friendster, MySpace). This promise of starting from scratch applies especially to entrepreneurs in Silicon Valley, and I’m energized to be working on a new startup.”
Exit Interview is a Signal vs. Noise series that talks to founders to see what happens after companies get acquired.
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20 comments so far
Donald Schenck 26 Apr 11
The Google Black Hole just might be a portal to an incredible web-based future. That is, perhaps they’re taking the technologies they acquire and putting together a killer product.
It could happen. Jus’ sayin’.
Jared White 26 Apr 11
I’m not sure this is an indication that getting bought out is “bad” per se. The problem is a single product-focused company getting acquired by a company like Google, because Google doesn’t really get products in my opinion. Not like Apple. Apple has acquired companies now and then and used them to build real products - iTunes, Final Cut Pro, Logic - all real products. Google just seems to buy companies to get know-how to add to their vast services infrastructure. Name a single “product” (Gmail excluded, perhaps) that Google has come out with that redefines a product category. Where’s Google’s Twitter? Facebook? iPad? Or iPhone, for that matter? Android didn’t really launch as a product, it launched as a half-baked demo OS that only now is fairly solid as a phone (forget tablets).
Anyway, I didn’t mean to make this an Apple vs. Google post - sorry! I just think that, as a startup, there are companies I’d want to sell to and companies I’d want to avoid. AOL , Google, Yahoo - AVOID!
Hashim Warren 26 Apr 11
Name a single “product” (Gmail excluded, perhaps) that Google has come out with that redefines a product category.
MI 26 Apr 11
@Hashim: You mean besides search? They’ve bought a couple that spring to mind in Google Analytics and Adwords.
Morley 26 Apr 11
It’s difficult to judge these stories because we can’t possibly know what would have happened if they didn’t get acquired. My gut is that most of these services - Bloglines and Jaiku un particular - would have ended up in the same spot, but their founders wouldn’t have been able to cash out. It’s hard to keep a company afloat if it doesn’t inherently make money. (Twitter and Facebook excepted.)
Matt 26 Apr 11
@Morley. Facebook makes 2 billion a year. But I agree, sounds like they needed a total architectural overhaul and those aren’t cheap
dylan 26 Apr 11
Funny that Google devoured the product that could have actually gotten them into the social game.
dana 26 Apr 11
yes
GregT 26 Apr 11
Quick accounting lesson: Revenues != Profits.
Facebook REVENUES are around $2 billion. Nobody really knows, but the WSJ says their profits in 2009 were around $200 million (on revenues of around $800 million).
Still hardly worth $50 billion market cap, but that’s another story entirely ;)
Tim 27 Apr 11
@Jared White
Those are mostly terrible examples. Final Cut and Logic both existed as products before being purchased by Apple. Saying they used those buyouts to build real products denies the fact that they were already real products…and successful ones at that.
Stuart 27 Apr 11
So like anything, don’t get bought out by Google unless you get a written confirmation and road map of where google see’s you going in the next few years.
Hamranhansenhansen 27 Apr 11
Jaiku also existed as a product before Google, but stopped existing afterwards. The point is that doesn’t happen at Apple. They bought NeXT and we got Mac OS X ; SoundJam and we got iTunes; FingerWorks and we got iPhone, iPad, and multitouch trackpads; and Final Cut was purchased from Macromedia when it was just a beta with a different name. None of these products or companies disappeared into a black hole. Logic had a lot of continuity, but the Emagic purchase also gave us GarageBand, which is new.
So his point that Apple productizes its acquisitions is a good one. We haven’t seen what happened to Siri yet, but we likely will.
PC 27 Apr 11
IMO if you get bought by a huge company and you’re small time, you should go in expecting this sort of result. It’s not that big guys are evil but your product likely represents quite a small, insignifcant piece of their overall strategy no matter what they tell you.
Calin 27 Apr 11
I really cannot understand why Google shut down the signing up process at Jaiku. How more users could do harm to Google culture?
François Nonnenmacher 27 Apr 11
Google Analytics roots are actually ”Urchin on Demand” from Urchin Software Corporation, bought by Google in 2005. So sometimes Google’s acquisitions do lead to a successful product.
enpanico 27 Apr 11
jaiku wasn’t so popular in asia. surprised to know it has been a hot topic
JD Ross 28 Apr 11
Whoa, that blog post was written by Tony Hsieh! As in, the founder of Zazzle and author of Delivering Happiness.
Weird you didn’t mention that.
Zaheer Baloch 28 Apr 11
Is it just me or Jaiku’s website layout looks familiar to 37s products. I wonder whether Jason noticed it!
Heikki H 28 Apr 11
From the users’ point of view, Jaiku ultimately died from the complications of the App Engine port. Before “moving to life-support” the service had been quite unreliable, and had some pretty severe periods of downtime. After the port it was a had shoddy, crashing piece of crap. There was not much interrest to continue the development, unfortunately.
I’m not trying to blame Jaiku team or Jyri. I realize they had no resources to keep developing Jaiku. If Jaiku was my company, I’d probably sold to Google in a heartbeat. ;)
Scott Shattuck 29 Apr 11
The idea that being acquired is going to let you build your business more effectively never works; regardless of who does the acquiring. Once acquired your mission is to build their business, regardless of how that impacts your original vision. It’s all good though…after acquisition you have a track record that will get your next idea funded far more quickly :).
Comments are closed