After a tough year that included laying off 100 employees and being written down, Hootsuite shared that it is cash-flow positive as of July 2016.
According to a report from Bloomberg, the social media management company focused on moving away from “growth for growth’s sake” and focused more on operations and profitability. The latter appears to be a growing trend for high-growth startups — just a few days ago, Toronto-based Influitive announced that it laid off 13 percent of its staff, with VP of marketing Jim Williams saying the company needed to shift from its business plan from growth in headcount to “efficient growth”.
In a similar vein, Hootsuite CEO Ryan Holmes told Bloomberg that the almost 1,000-person company had trouble managing their massive scale.
“Across the board we weren’t performing as well as we wanted to and if we look into the future and look at best of breed public companies, we weren’t where we needed to be,” said Holmes. “As you start to scale, from that incredible growth, you have to put the systems in place to be able to manage it.”
Hootsuite, considered one of Canada’s unicorns, has been on the radar for an IPO for some time now, so it’s yet to be seen if this good news will be a step towards that. As for how the company managed to become cash-flow positive, Holmes named cutting staff and hiring a new chief financial officer — former OpenText exec Sujeet Kini — as driving forces.
“It was sad for everybody,” Holmes told Bloomberg. “But on the other hand, a lot of people realized that it needed to happen. I think of it as a metamorphosis where you shed your skin and you move on bigger and brighter.”
