So Jason Calacanis has brought down the hammer on some employees at Mahalo, his “people-powered search” startup — and took the extraordinary step of returning to blogging momentarily to announce the news, after having made a big show of turning his back on it. In typical Jason fashion, he even included what is becoming a kind of blogosphere in-joke: The headline of his post is “Tough times; hard decisions,” a wording that Techmeme’s Gabe Rivera notes is becoming a recurring theme. And if you think Jason didn’t know that, then you don’t know Jason Calacanis.

The cuts at Mahalo aren’t really that surprising, given Jason’s widely-circulated email newsletter about how the downturn is going to hit startups hard (something Ashkan of WatchMojo thinks was a clear sign layoffs were coming at Mahalo). But how many people did he actually cut, and why? That’s a murky question indeed. Some reports said 30 per cent of the staff were shown the door, and Nick Carlson at Silicon Alley Insider said 11 out of 20 (or maybe 25), which is closer to 50 per cent. TechCrunch said 10 per cent, which is the number Jason uses.

But it’s worth wondering just who is included in those staffing numbers. It’s not clear, for example, whether they include the 20-odd people working in the Manila office in the Philippines, the ones Allen Stern of Centernetworks mentions in his post (complete with a photo, which now appears to have been removed from Flickr). Some sources say that the number of full-time paid employees has been cut by 50 per cent, leaving a small number along with unpaid volunteers and freelancers on contract.

Regardless of the number, is it enough to get Mahalo the kind of scale that will make it a viable search site? I think Ash has a point when he says that the company’s current strategy pretty much consists of trying to whip together links and a blurb about whatever is hot on Google Trends, and then hope that Google indexes it quickly and it shows up high in search results. Is that a viable strategy? I confess that I don’t really know.

Update:

Erick Schonfeld at TechCrunch has posted the text of Jason’s email newsletter, despite the fact that the email specifically says “Do Not Reprint.” As Erick notes in a comment on his post: “He is the CEO of a startup that just went through a layoff today, and he emailed his thoughts on the matter to almost 9,000 people. This is not a private email.” Jason then steps in to ask that it be taken down, and threatens to send a DMCA takedown notice to TechCrunch’s ISP (something he has reportedly done to others in the past for similar reasons). Mike Arrington’s response is here.

Update:

Apparently, Jason doesn’t want his email newsletters posted any more because he “doesn’t want to give the haters a platform,” according to a Twitter message. The text of the email has removed from both Silicon Alley Insider and TechCrunch, but you can still find it.

Original post:

Jason Calacanis, the diminutive entrepreneur behind Weblogs Inc. and the “people-powered search engine” known as Mahalo, seems to be attempting to transform himself from just a scrappy CEO into a Web 2.0 cross between Deepak Chopra and Tony Robbins. It’s actually been coming for some time, but really kicked into gear when Jason stopped blogging and started sending out an email newsletter to a select group of followers. Of course, his missives routinely show up on various blogs anyway, which is a nice way to have your cake and eat it too. Which is great, because it means that none of us is denied access to Jason’s words of wisdom.

In his latest missive, Jason gives each of us the benefit not only of his years of startup experience but also of his bachelor’s degree in psychology, both of which taught him a number of key lessons about how to succeed even when everything is going against you. I’ve read through his newsletter several times and extracted some of those key lessons:

• People are scared, and they should be.
• Metaphors swing both ways.
• Sometimes it’s really, really stupid to keep fighting.
• The darkest hour is, in fact, right before the dawn.
• If you are suffering from depression or anxiety, go see a professional.
• Feel free to print this out.
• You need to access where you’re at, and fight on.
• If you fail, then by definition you have tried.
• If your idea is wrong, it really doesn’t matter.
• The market will tell you what it wants.
• Execute better.

Really, these just scratch the surface of what you’re going to find in Jason’s missive. There’s so much gold in there, it’s like Fort Knox or something. I’m not kidding (although Jason didn’t include one of the lessons he learned at TechCrunch50, which is to feel free to let people know how you feel, even if the mike is on). So, is Jason a genius whose newsletter is full of useful wisdom, as some would argue, or a putz who strings together bromides and motivational claptrap? That one is up to you. Mahalo.

I know that the goodbye post written by Mahalo supremo Jason Calacanis for his blog is supposedly heartfelt, and full of what he no doubt believes (or hopes we will believe) is authentic human emotion, but it still feels all wrong. Is it the fact that it reads like a bad script? Perhaps. And the fact that the photo Jason uses is from Michael Jordan’s retirement press conference (his second, I have to note) probably doesn’t help. Or maybe it’s the fact that in the script, Jason’s PR rep says that the great man is “fighting back his emotions” and asks the (theoretically) attended throng to “respect the privacy” of his bulldogs.

Or maybe it’s the idea that Jason — a man who uses Twitter, and his blog, and every other social-media tool he can think of, to relentlessly pump Mahalo — is giving up blogging because he craves something more “acoustic and authentic.” That part stretches believability to the breaking point. If anything, an email newsletter is a step backwards into megaphone and pulpit land; which makes sense, I suppose, since I have a hunch Jason much prefers the one-way pulpit to the two-way blogosphere. And when Jason promoted his new email list on FriendFeed, he said it was an “insider” list and was for: “insiders only, please — no casual folks.” Seriously, who talks like that? Not even Jason could be so totally without even a stitch of self-awareness.

But the real giveaway is comments like this one, made on FriendFeed about his departure, in which he says that “Your dignified questions and responses are appreciated during this very emotional time for me.” That’s just too much — even for someone like Jason. That hasn’t stopped some people from taking his comments about blogging very seriously, including some who usually know better, but I am calling BS on this one. I refuse to believe it — and if it is true, I refuse to care :-)

Amid all the to-and-fro’ing on Techmeme about Twitter and its lack of a business model comes a post from Jason “Mahalo” Calacanis, in which he tells us the secret to building a business model in Silicon Valley. Is it a vision of where the market is going? No. Is it a compelling service with a unique value proposition? No. Is it a twist on some existing service that makes your offering a killer app? No. You have to be “a player.”

In a nutshell, Jason appears to be saying that certain people — such as Twitter founder and former Blogger co-founder Evan Williams — don’t have to have a business model, at least in the traditional sense that their company actually makes money. They just need to build traffic and users until they are so gigantic that someone either buys them or they can create a business based on their huge user base:

“Running a startup is NOT about revenue anymore–it’s about critical mass. It’s about scale. When you’re playing in the big leagues with unlimited access to capital you shouldn’t worry about revenue BEFORE you have critical mass.*

* Note: if you’re not a player like Ev, and you don’t have unlimited access to capital do not take this advice and focus on building revenue streams.”

So there you have it — Business 101 from Professor Calacanis. Is that the approach Jason is taking with Mahalo? If so, I wish him luck, and I hope that he has “unlimited access to capital,” which strikes me as a somewhat unlikely condition for anyone (except maybe Bill Gates) to find themselves in. In any case, there’s a refreshingly contrary opinion from Don MacAskill, founder of the successful image-sharing service SmugMug.com, in the comments on Jason’s post. Don says:

“I have unlimited access to capital, but I still focus on building my business first and my scale second. The “scale first, then find a business model” route only works as long as you’re in a bubble, like we are now. But if that bubble bursts before Twitter both gets to scale and finds their business model, they could be in big trouble.”

If I were Ev Williams, I would pay a little less attention to Jason, and a little more attention to Don. In other words, focus at least part of your energy on building a sustainable revenue model — or even the seeds of one — now. Don’t put it aside and hope that it will magically appear later. And don’t listen to your Uncle Jason when he tells you that you’re a “player” now, and so you don’t need a business model.

I have to say I’m not a huge fan of Mahalo.com, the “people-powered” search engine from Jason Calacanis, but then I’m not really the target market (as Jason has pointed out in comments here before). And I can see how it might be useful to some people, if they’re looking for just one or two results. But as skeptical as I am, I look like Jason’s biggest supporter compared to Andrew Baron of Rocketboom, who wrote a recent post entitled “Why Mahalo is Fundamentally Flawed.”

I’m not sure what happened between Jason and Andrew, although I know that Jason offered Amanda Congdon a job after her acrimonious departure as the host of Rocketboom, and he also made some fun of Rockeboom (in what I thought was a kind-hearted way) in a recent Mahalo video. But still — Andrew doesn’t just criticize Mahalo for a few flaws in his post. He effectively accuses Jason of perpetrating a gigantic con, in which he pretends to set up a site to help people find search results, but in reality just wants to get them to click on his ads.

It’s interesting to read the comments on Andrew’s post as well: Jason shows up and gamely tries to respond to the criticisms, and also disproves Andrew’s claim that there are no positive reviews of Mahalo other than Jason’s (which Andrew wriggles out of by saying they aren’t credible). Then, after a comment from Duncan Riley of TechCrunch, the Rocketboom founder wonders whether Duncan’s comment came after a “nudge for a voucher,” whatever that means. It’s bizarre.

Just for the record, I have nothing against Andrew — he was a panelist at the original mesh conference last year, and we were happy to have him — and I think he was a pioneer with Rocketboom. But his vendetta against Jason seems more than a little over the top.