Mahalo Joins the Layoff List

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The number of startups laying off sizable chunks of employees due to “tough times” (as opposed to, say, a lack of a business model that generates revenue) is growing daily. I’ve been pretty mum on this because I’ve been calling bullshit on these startups for quite some time and don’t have a whole lot to say about them now that they’ve been exposed.

But I couldn’t help but mention that today one of my favorite consumer Internet startups regrettably fell victim to these “tough times.” That startup is, of course, Jason Calacanis’ Mahalo.

Frankly, the layoffs at Mahalo came as a shock to me because Calacanis has been a prescient guy. He predicted problems way back in September of 2008 before anyone else in the world knew that the shit was hitting the fan - “two days before the single largest drop in the history of the stock market” as he likes to point out. Well, it’s a lifetime in Robert Scoble’s universe.

If Calacanis’ prescience didn’t save Mahalo, I certainly would have expected the company’s strong financial position to. I was under the impression that at least 25% of all of Google’s AdSense payments were going to Mahalo.

All sarcasm aside, it’s easy to pick on Mahalo and Calacanis. After all, Calacanis is a prominent personality in the startup world and he has exposed himself to more criticism than most of his peers. One might argue that he deserves a little credit for that.

Unfortunately, it’s Calacanis’ habit of sticking his ass out there like a baboon that actually makes him a deserving target of criticism.

As one TechCrunch commenter pointed out:

Is anyone surprised? Another CEO that prefers to do lots of stuff beside running their company. Like Seesmic’s CEO… Darting around the world. Spending time playing with mobile phones, driving around in $100K electric cars. It’s not that these guys shouldn’t be enjoying themselves - but when they spend so much time doing stuff other than running their companies it shouldn’t surprise anyone when their ventures fail or, at least, contract. At least, if they’re going to fool around they should do it away from the glare of the tech echo chamber and all the pseudo journalists and bloggers that write about them. Running a company, either as a CEO or President is hard work. Way harder then these guys think.

Calacanis has been a familiar face on the Web 2.0 party circuit and might best be described as a “Web 2.0 socialite,” not a startup CEO. He has also found other distractions, including TechCrunch50.

Does that mean that that Calacanis has been an absentee CEO? I’ve never witnessed Mahalo’s operations first hand so I don’t know. But it’s quite clear: Calacanis has had his fair share of extracurricular activities. And when you’ve taken other people’s money to build a company from the ground up, playing for multiple teams isn’t easy and it isn’t recommended.

Maybe Calacanis is an incredibly talented multitasker. Maybe he pulls 21 hour workdays. Maybe he’s just that damn good.

But if I was dumb enough to work for a company like Mahalo and was laid off, I might feel let down by the “leadership.” In the case of Mahalo, the CEO is known more as an industry celebrity than anything else and seems to be everywhere except his office.

That begs the question - has he been putting in a full-time effort? Has he done everything he could have to make the company successful? Has he been distracted?

It’s quite likely that companies like Mahalo (read: doomed to failure) would have laid people off eventually regardless of economic circumstances. Most of them are overstaffed and would have run out of greater fools to keep the gravy train going at some point.

But that doesn’t matter to the people who work for these companies. While they don’t get my sympathy, I do respect the fact that they place their trust in their CEOs. They have a right to expect that their CEOs will be fully dedicated to “making shit happen.”

I will conclude with two simple questions - if you took all the time Calacanis spent organizing and attending TechCrunch50 and celebrating its “success,” what could he have accomplished for Mahalo? And if you took all the time Calacanis has spent doing his own thing (like writing about other unprofitable startups, planning a video blog about his then-undelivered Tesla and searching for cool things to buy for the Mahalo office), would Mahalo be in a different place?

The problem is that we don’t know.

For all of the newly-unemployed getting used to the idea that your Mahalo, hi5, Wikia, Pandora and Seesmic stock options are worthless, here’s a video with some handy advices for finding a better job.