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Genius quietly laid off a bunch of its engineers — now can it survive as a media company?

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Brain drain

Genius quietly laid off a bunch of its engineers — now can it survive as a media company?

Genius, which raised $56.9 million on the promise that it would one day annotate the entire internet, has been losing its minds. In January, the company quietly laid off a quarter of its staff, with the bulk of the cuts coming from the engineering department. In a post on the Genius blog at the time, co-founder Tom Lehman told employees that Genius planned to shift its emphasis away from the annotation platform that once attracted top-tier investors in favor of becoming a more video-focused media company.

“After taking a careful look at the company and our priorities,” Lehman wrote, “we’ve had to make some tough decisions about how we want to spend our resources. And unfortunately this meant that today we laid off some very talented people.” The company then took the unusual step of posting the Genius usernames of those it had laid off — 12 full-time and five part-time employees.

At the same time, Lehman noted that the company was continuing to hire for roles in video and sales. The company recently redesigned its homepage with expanded space for editorial content and advertising. It has also been deepening its Behind the Lyrics partnership with Spotify, for which it contributes a mix of song lyrics and factoids that pop up in a slideshow format when you’re listening to popular songs.

“The change we made in January was in recognition of the fact that we needed to shift resources from capturing knowledge — which we've been doing almost exclusively for the past five years — toward packaging and distributing knowledge into easy-to-consume formats like video and Spotify Behind the Lyrics,” Lehman told The Verge.

It’s not unusual for tech companies to transform over time, though typically they are loath to lay off engineers. But Genius’ shift is more dramatic than most: going from all-encompassing annotator of the internet to a more traditional media company model, chasing video views alongside an ever-growing number of well-capitalized competitors. The move illustrates the company’s difficulty attracting contributors — and an audience for their contributions — particularly outside of the music world.

In an interview last week, Lehman said the company had turned to video in an effort to reach its core audience‚ which continues to be rap fans, beyond its website and mobile apps. “Video makes it a little bit more accessible,” he said. “I love the Genius website. One of my favorite websites. But it can be a little frustrating to use. You have to be really, really dedicated to learn everything about a song on Genius. You’ve got to be down to click and read a lot.”

Genius’ videos to date have included interviews with artists about their craft, and a series where rappers perform original freestyle verses. One of Lehman’s favorite videos traces a whistle sample featured in a series of popular songs back to its origins in a Quentin Tarantino movie. Last week, Genius posted a video about rapper Lil Yachty learning how to make pizza. The company is also investing in original editorial content, aggregating news headlines, doing Q&As with artists like the Track Burnaz, and writing short profiles.

Lehman said the new focus is in keeping with Genius’ original mission of helping people look deeper into popular culture. Videos often contain information that came from user-contributed annotations, Lehman said, and the format is more popular than the plain-text notes on which Genius was founded. "All of the knowledge in our videos is rooted in what the community is doing," he said.

The shift is the latest chapter in a company that has spent several years setting outsized expectations. Founded in October 2009, Genius joined the prestigious accelerator Y Combinator in 2011. The accelerator had previously been responsible for growing Dropbox, Airbnb, and Stripe, and Genius arrived with large ambitions of its own.

Traffic to the website grew quickly in 2011, and it became the default destination for anyone seeking song lyrics or their significance. The next year, Silicon Valley venture capital firm Andreessen Horowitz put $15 million into the company, recognizing a more ambitious opportunity. “It turns out that Rap Genius has a much bigger idea and a much broader mission than [rap],” the firm's co-founder, Marc Andreessen, wrote at the time. "Which is: Generalize out to many other categories of text... annotate the world... be the knowledge about the knowledge... create the Internet Talmud."

For Andreessen, the mission was personal. Before starting his venture capital firm with Ben Horowitz, Andreessen had co-invented Mosaic, the first web browser. As he explained in a post on Genius, “It seemed obvious to us that users would want to annotate all text on the web – our idea was that each web page would be a launchpad for insight and debate about its own contents.” But the infrastructure of the web could not yet support such a system, and Mosaic gave up on the effort.

Genius, then, represented a chance to make good on one of the earliest promises of the web. And as Genius grew, so did its offerings: News Genius, Poetry Genius, and Rock Genius all followed.

As it developed, the company suffered growing pains. It went years without licensing the lyrics it hosted, capitulating only after receiving a takedown notice from the National Music Publishers Association. It later admitted to using unscrupulous search engine optimization tactics, leading Google to temporarily demote it in search rankings. The founders developed a reputation for cocky posturing — all three wore sunglasses onstage during their talk at TechCrunch Disrupt in 2013 and continued to describe the site in the loftiest of terms.

“Rap Genius is going be the fabric of the internet,” co-founder Mahbod Moghadam said in 2014. “We’re going to have annotations on other sites, so every other site in the world like the Wall Street Journal and the New York Times are going be Genius-powered and they’re going to have our annotations on them. And then the Genius platform will take over the internet; everyone’s most important statistic that they have in life is their Genius IQ.”

Moghadam resigned two months later for annotations he made on the manifesto of Elliot Rodger, who shot and killed six people and injured 14 others in Isla Vista, California.

Soon after, Genius made a definitive push to realize Andreessen’s vision. By 2015, Genius claimed 40 million visitors to its website a month, 1 million of whom had annotated a post. Eminem, producer Rick Rubin, and the novelist Junot Diaz were among those who had contributed annotations. In January of that year, the company began testing a tool called the web annotator, which allowed anyone to add genius.it/ before any URL and then highlight and annotate text.

The web annotator was the centerpiece of the company’s efforts to become a kind of universal comments section for the internet. But it faced a storm of criticism last year after some writers complained the tool was being used to harass them. The annotator also raised concerns that it could have been used to inject malicious code onto visitors’ computers, though it’s since been tweaked to address that vulnerability.

But the biggest problem with the annotator from Genius’ perspective is that few individuals are using it. After more than two years of development, the Chrome extension has only 12,320 users. It was last updated in June 2016.

A separate effort to encourage people to annotate political speeches and other current events content at News Genius faced hurdles of its own. An editor hired to evangelize for the platform left after seven months, and was not replaced. Promised partnerships with major news media organizations never materialized, except in the case of The Washington Post’s Fix blog, which still occasionally uses the platform to annotate the news. One former employee said the company had never put enough resources into the project. “News Genius always seemed really remedial,” the employee said.

About 600,000 people visit News Genius a month, Lehman said, a figure that had grown 10 times since before President Donald Trump was inaugurated. And the number of people who annotate a post on Genius each month is now at 10,000, up 30 percent from the start of the year. “More people are using News Genius now than ever,” Lehman said. Meanwhile, overall traffic to the website and apps has grown to 62 million a month.

Lehman says the LA Times, The Boston Globe, and Univision are News Genius users. But the organizations appear to have used the tool only sporadically over the past year — and rarely since the election, when calls for more context around the daily news began to intensify. The company has been largely absent from the debate around fake news, even though News Genius was intended to push back against dubious claims. One of the Times’ political reporters has used the tool just two times. “It depends on how you define ‘active,’ but we do continue to use Genius,” a Times spokeswoman said, noting that reporters use the tool to mark up major political speeches.

The company partnered with GQ in October to annotate the magazine’s interview with Kendrick Lamar. “This was a rare win for the web annotator,” one former employee said. Meanwhile, few new publishers appear to be signing up to use the tool, giving Genius fewer big channels with which to promote its use for current events. And other news organizations are building similar features of their own. NPR has created an annotator that places notes in the body of the text — and the LA Times has considered using that tool as well, a spokeswoman said. The nonprofit organization OpenNews has built an open-source tool of its own for newsrooms to use.

Toward the end of 2016, at least some employees began to wonder whether Genius was breaking through to the mainstream. Neither Andreessen nor his co-founder Ben Horowitz, has contributed an annotation since 2015. (A spokeswoman said Horowitz, who sits on the Genius board, was not available for comment.) According to company legend, the rapper ASAP Rocky once threw up in their offices — but maybe now Genius has lost some of its cultural edge. “No one seemed to interact with Genius independently of me throwing a link at them and saying, ‘click on this,’” one former employee said. “It seemed like a lot of the user base was white kids in Australia.”

The company also seems to be restructuring its revenue model. Though the Genius has had a chief revenue officer and a vice president of partnerships, it only recently announced its first jobs in sales. “It's unclear what the sales process was [or] is,” one former employee said. “Basically, it's a skeletal staff, whose ad revenue appears to not be able to keep up with company expenses.”

Asked whether the company would continue trying to build a massive tech platform, Lehman said Genius’ vision remains as large as ever — but that it’s narrowing the scope of its editorial ambitions, and leaning on tried-and-true media formats to reach its audience. Genius has hired seven people since the layoffs, Lehman said, mostly in video. “We have so many near-term opportunities with music that we don’t want to let them slip through our fingers,” he said.

And as for the ASAP Rocky vomiting episode? Lehman declined to address that matter directly, although he did seem to acknowledge the possibility. “It is,” he said, “a great office to throw up in.”

Correction, 12:42 p.m.: This post has been updated to reflect that the number of people laid off at Genius represented a quarter of the staff, not a third.

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