OneRiot laid off seven employees Friday, dropping the four-year-old startup to a total of 23 with the intent of sharpening its focus on building a real-time ad network. The Boulder-based company elevated president Tobias Peggs to the role of CEO, and moved him from San Francisco to Colorado.
Peggs argued in an interview that the layoffs were not a sign of weakness at OneRiot. Rather, his company’s RiotWise product for matching ads to real-time trending topics is taking off. “We just felt it was the right thing to do to really focus on that,” he said. “The easy thing would have been carrying on with too many balls in the air.” RiotWise launched in December and now carries 1 billion impressions per month for more than 100 apps and services, said Peggs, with a respectable 0.8 percent click-through rate on mobile banner ads.
Along with the layoffs, OneRiot is getting rid of its toolbars in favor of growing search distribution through its APIs, and dropping affiliate ad relationships, Peggs said.
However, these aren’t just no-name product team layoffs. Two of the seven are Robert Reich and Kimbal Musk. Reich, a co-founder, created the enterprise collaboration software that gave birth to OneRiot. Musk — who was co-founder of Zip2 with his brother Elon and is a member of Tesla Motors’s board of directors — was CEO of the company from the very early days, and will now be chairman. And with co-founder David Mandell having previously exited, that leaves only one OneRiot co-founder remaining after four years, CTO Peter Newcomb.
OneRiot has been in search of traction for a while. It had already been through a major revamp two years ago, becoming a real-time search engine instead of a sidebar called Medium that tried to show where swarms of activity were happening on the web. And the company has burned through a lot of money — with $ 27 million raised across three rounds. However, Peggs said OneRiot won’t have to raise more to fund its latest refocusing.
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