Many startups have shut down, but Whisper refuses to be one of them. The company confirmed that it has let go 20% of its staff so it can become sustainable in the long run.
“We have been very focused on getting the company cash-flow positive,” Whisper CEO Michael Hayward confirmed. Fourteen of 71 employees have been laid off with a focus on the editorial team. Whisper’s COO Jaime Mendez also put in his resignation in a mutual decision after he was promoted from head of product to the arduous operating officer role last year.
Hayward confirms Whisper now has 20 million active users across its app and website monthly, giving it a fair chance to monetize through sponsored ads. The emphasis on externally sourced programmatic ads led to some layoffs on the sales team.
Founded in 2012, Venice, LA-based Whisper has raised $61 million from prestigious investors, including Sequoia, Lightspeed, and Shasta Ventures, which led a $36 million Series C in 2014.
The focal product issue with anonymous apps like Whisper is, they aren’t social in a way that creates true network effect. One can’t build a group of friends or collection of substance, so each day you essentially start from scratch. Gossip, one-liner jokes, and bullying get boring after a while and with no strong social ties pulling you back, it’s easy to drift away.
Whisper is based on text rather than the eye-catching photos and videos dictated by modern social networks. Whisper adopted video sharing, but there’s not much to put on camera if you don’t want your identity revealed. With little data for ad targeting, anonymous apps earn less per impression than those who know who you are.
Layoffs may be the best path forward for Whisper at this time. If it can strip down to the most efficient business model and satisfy staff and customers, it might be able to become a sustainable long-term business rather than relying on skittish venture funding.