A New Enterprise Software Franchise: Optimizely

At the tip of the innovation spear, behemoths like Facebook, Google, and Yahoo! have to invent technologies that deal with the hard problems they encounter internally as they grow. Out of these efforts, a number of projects like MapReduce Cassandra, BigTable, and Borg have been commercialized into products, companies, or open-source projects like Hadoop.

The founding of Optimizely follows a similar vein. The founders—Dan Siroker and Pete Koomen—met as product managers at Google, where testing and optimization (such as A/B testing) are deeply ingrained in the product development process. So much so that it was widely reported that Marissa Mayer once tested 41 different shades of blue for the Google homepage!

But it was during this time at Google that it became obvious to Dan and Pete that every company —big or small—should be able to use testing the same way. They set out to build Optimizely, and in a short four years, the company is now the hands-down leader in the new software category of website optimization.

As we move from on-premise to cloud computing, our firm is betting that a completely new set of enterprise software franchises will emerge. Optimizely is clearly one of them, which is why I am pleased to announce that Andreessen Horowitz is leading a $57M Series B round in Optimizely.

We invested in the company for many reasons, including:

Strong founder/market fit. The founders have taken a core Google competency and are making it their life’s work to extend it to the rest of the world, big or small.

Classic disruption. The company converted a complex process that requires engineering resources into a simple tool that almost anyone can use, which dramatically broadens adoption.

Solved a hairy technical problem. Before Optimizely, it was really hard to create drag-and-drop tests via a web-based editor while avoiding slowing down the page.

This investment also represents a few larger trends we care about, including:

Mobile. Optimizely just launched its iOS product and is already seeing tremendous demand from new and existing customers. We see huge upside potential here.

SaaS and especially the “departmentalization of IT”. Marketers, product managers, and other operators throughout a company can buy and use the product on their own—instead of having to go through only a central IT organization.

Democratization of tech. Optimizely also belongs to a larger category of tools that takes what was previously only possible for people with technical training, and makes them accessible to people who don’t (or don’t want to) code but want to apply their expertise on the web.

Optimizely is the clear leader in a huge and new must-have SaaS category. I’m thrilled to be joining the board and look forward to working with Dan and Pete to grow the company into the next category-killing franchise!