What happens when a startup's optics veer too far from its operations.
On Feb. 1, Mona was working from home waiting for a conference call to start when she was kicked out of her email.
This wasn’t a tech issue. She knew exactly what was going on. The atmosphere at work, always chaotic, had recently transitioned into full-fledged panic.
“We’re toast!” Mona, who declined to use her real name, told a coworker. “My email just shut down in front of my face—we’re done!” A few minutes later, an investor dialed in and made it official: they’d been fired.
In total, 55, or more than a third, of Odyssey’s staff was let go. Those in the company’s new swanky NoHo office returned to their desks, packed up, and left. Amid the commotion, the remaining workers huddled in the kitchen. “It was incredibly sloppy,” says a current employee who witnessed the layoffs.
Just nine months earlier, the little-known media startup had raised $25 million in capital from seasoned venture capitalist Michael Lazerow, who led the round. At the time, he called Odyssey “the most exciting company I have seen since investing in BuzzFeed.”
But interviews with more than 10 current and former staffers (some of whom asked to remain anonymous due to confidentiality agreements or fear of retribution) —along with the company’s founder and lead investor—reveal a cautionary tale about what can happen when a startup’s optics veer too far from its actual operations.
A bright spot in a declining industry
Odyssey’s origin story is that of a quintessential startup. Evan Burns, a charismatic millennial with a unicorn-friendly name, conceived of the site in 2010 as a student at Indiana University at Bloomington. The idea, while fairly simple, was depicted in sufficiently ambitious terms. Odyssey would “democratize” content by “empowering” people with different backgrounds and communities to write, publish, and share their opinions and stories. The model was already used by publications such as the Huffington Post and Forbes, except in lieu of unpaid professionals, Odyssey targeted unpaid college kids already well-versed in social media.
Starting as a network of print publications at college campuses, the company added a digital version in 2014 and relaunched as a tech-focused media startup. By the end of 2016, its staff had swelled to more than 150, and its network of unpaid college-aged writers had skyrocketed past 10,000. Odyssey claimed its articles generated around 30 million unique visitors a month.
The company sold its grand vision and breakneck growth to young editors from established media organizations including Fortune, Time, and The Huffington Post, sweetening the deal by promising significantly more than they were making at their former jobs, according to several hires.
It had the money. In the spring of 2015, soon after an Odyssey article titled “Why Girls Love the Dad Bod” went viral, the company secured $3 million in venture funding, which it used to hire more content editors and aggressively expand the number of writers in its network.
Between November 2015 and February 2016, Odyssey grew its unique monthly readers from 15 million to 26 million, according to marketing analytics firm comScore. On the back of this impressive growth, Michael Lazerow and Jason Epstein, a managing partner at the investment firm Columbus Nova, poured $25 million into the company.
Flush with cash and positive press, Odyssey went on a hiring binge that, at its height, brought in multiple new employees a week, according to a former staffer.
A broken system
In early 2016, when an Odyssey recruiter reached out to Sarah, 25, an employee at a midsized traditional media outlet who declined to use her real name, the timing was perfect. Her company had announced it was downsizing, and Odyssey seemed like the digital life raft she needed. The speed at which she was hired—10 days from interview to offer—was, in retrospect, a red flag.
On her first day, with the enthusiasm and apprehension of any new job, she entered Odyssey’s Manhattan office to start as an assistant managing editor. By the time she eventually left—at 10:30 p.m.—she had learned she was little more than a glorified telemarketer.
Sarah was tasked with launching 12 brand-new Odyssey “communities,” each composed of at least a dozen unpaid writers who attended the same college. On top of that, she was handed eight existing communities to manage. Altogether, Sarah was responsible for editing a network of more than 200 writers. There were rules around everything, from how often she needed to video conference with her college editors to the exact number of articles she needed to publish in a week.
In order to handle the volume — editors were expected to publish at least 240 articles in two days — multiple former employees say there was no time for any real editing. Instead, the process consisted of scanning an article with online proofreading tool Grammar.ly, checking the headline for blatant errors, and publishing as quickly as possible.
“It was becoming spam,” says one former assistant managing editor. “They didn’t care about the content. One of my writers had plagiarized a Vogue article, but I can’t really blame her because we were pressuring them to get their article count up.”
Odyssey’s technology was meant to fix some of these workflow issues. Burns was bullish on a proprietary algorithm called the “Invisible Hand,” which he claimed differentiated the site from competitors by automating the editing process. In interviews, he described the tool as the company’s secret sauce, capable of creating better-structured articles and alleviating editors’ workloads. But according to several employees, it did little more than sort content by subject matter and page-views, a function found in most off-the-shelf publishing software. Asked whether the Invisible Hand saved him time, a former editor just laughed. “It was a bunch of bullshit.”
Crazy hours are one thing when employees believe in a company’s goals. But at all-hands meetings, Burns would outline vague, big-picture ideas that didn’t align with the day-to-day reality of grinding out articles, according to several former editors. “I still don’t know what the fuck ‘democratize content’ means,” says one ex-staffer.
In May 2016, shortly after raising its latest round of funding, Odyssey launched a new version of its website —which promptly broke, sending traffic into a tailspin. Unique visitors to the site fell from 21 million in April to roughly 10 million in May, according to Burns.
The fall-off made it more difficult for an already struggling sales team to close deals. By the end of 2016, Odyssey had generated about $9 million, primarily in programmatic ads, an impressive amount for a three-year-old startup but less than half the amount projected by the company.
Instead of pausing to shift strategies, Odyssey barreled blindly ahead. More editors were hired. Publication goals weren’t adjusted, and so the messaging became “get your writers to do one haiku, literally three lines, and that will count,” says one former staffer. Several editors told Fortune they began creating fake profiles and writing under pseudonyms to increase their article count—whatever it took to meet the arbitrary content targets.
“If you give people impossible numbers, they are going to find a way to fudge the line,” a former managing editor says. “It was just like Wells Fargo — the same exact idea, just with content.”
Leading into the fall of 2016, a pervading sense of gloom hung over the New York office; the frantic pace of production was grueling, the site still wasn’t fixed, and traffic continued to flounder in the low-teens. On the sales side, everyone knew the company was falling short of its goals. “They blamed product, they blamed everyone but themselves,” says a former senior sales director. By October, worried that the company was nearing the end of its runway, she began searching for a new job.
Despite all this, Odyssey didn’t quite dial back spending. In December, it moved out of a WeWork co-working space into its own large office in Manhattan’s trendy NoHo district. That same month, it shelled out approximately $100,000 to send the entire New York team to a strategy and planning session at its headquarters in Indianapolis. Still, its biggest expense was people.
At this point Lazerow, who had thus far been an investor and board member, decided it was time to step in and take a more active role.
On Feb. 1, he spent the day laying off people he had never met.
A work in progress
Since then, the company has gone quiet. It recently moved back into a WeWork space in Midtown, where it houses a lean editorial staff of roughly 15 to 20 people. Burns has been stripped of all major management and financial responsibilities and given the title of executive chairman. The company is now being run by Eoin Townsend, who previously served as the chief product officer at advertising company Collective.
As Lazerow tells it, if Odyssey’s fundamental technology hadn’t broken, it would be generating BuzzFeed-level traffic. And so he shifted the company’s focus from editorial to tech. Hence the layoffs. If this sounds like an aggressively rosy interpretation—it probably is. It’s unclear how much revenue is coming in now, considering much of the national sales team was cut during the final round of layoffs.
A year and $25 million later, Odyssey looks eerily similar to the company Lazerow originally invested in, just with significantly fewer page views. Although it’s been about a year since Odyssey attracted 30 million monthly readers, it still touts that figure on its website. From a distance, you’d never know the capital, talent, and sheer energy that was wasted in Odyssey’s journey to return to its starting point.
But Mona does, as do the dozens of other people who found themselves suddenly unemployed. When asked to reflect on her brief stint at the company, she doesn’t hesitate. “On paper it seemed new and different and exciting,” she says. “In reality, it was a total clusterfuck.”