Digg's Strategy: Revert to "Startup Mode"
In an interview with Mashable earlier this week, Digg CEO Matt Williams revealed steps the company would take in an attempt to reach profitability in 2011. "We're in startup mode again," says Williams.
Besides lowering operational costs, the company will downsize its staff from 67 to 42 people by laying off a third of its current workforce.
Digg's current situation, even after several rounds of layoffs, doesn't exactly reflect the bare bones reality most start-ups face. With multiple rounds of funding under its belt and a staff of 42 people, they are hardly scraping it together to bring "the dream" to the people. Most start-ups also don't have to work with a product saddled by baggage from 6 years of development and change.
The heaviest baggage that Digg will have to sort through is the damage from major user backlash against its launch of Digg Version 4 earlier this year. In an attempt to stay relevant in the changing face of social media, Digg angered their most loyal user base.
Digg Version 4 dropped many of the traditional features, including a "bury button" that allowed users to vote content down. It also includes the addition of features that change the ranking algorithm and provide professional publishers the ability to push content directly to the site via rss feed. Some argue that, with the addition of such features, Digg has abandoned the core values it was founded on.
To make matters worse, on Monday, Digg faced accusations that it had gamed its own system. Digg's defense? It was just a test.
Calling a "do-over" and promising to focus on community engagement may not be enough to bring users back to Digg. Cutting costs and layoffs will improve profitability in the short term, but for long term viability, CEO Matt Williams' effort may be equivalent to rearranging the deckchairs on the Titanic.
What do you think?