The outgoing CEO of Cincinnati-founded data startup Astronomer said the company’s outlook remains strong even as the company cuts dozens of jobs and shifts its leadership structure entering 2023.
Joe Otto, who’s helmed Astronomer since 2018, led the company through multiple high-stakes funding rounds, including a $213 million Series C in March 2022. He talked to Cincy Inno this week addressing the previously announced job cuts and his reduced role.
Astronomer, effective Jan. 4, cut 76 staffers, or 20% of its workforce, as the tech sector continues to shrink amid lingering economic concerns. The company also announced a “simplified organizational structure,” a move that shifts Otto from co-CEO to a board position.
On the layoff front, “we hired too many people too fast,” Otto said. That became apparent, he said, when Astronomer moved heavily into commercialization mode and with the rollout of its latest product, Astro, a cloud-based modern data orchestration platform (data orchestration aims to break down silos to make data accessible across an entire organization).
Astro, he said, “changes the whole way we’re selling.” It’s less enterprise and more product-led growth, which requires different engagement. “There’s no ‘main’ customer any more,” Otto said.
The job cuts largely included the go-to-market sales team, which was distributed.
“Very few people in Cincinnati were affected,” he said.
As of April, Astronomer employed 260 globally with hubs in Over-the-Rhine, New York, San Francisco and San Jose, Calif.
With the reductions in spend, Astronomer is better equipped to emerge from the downturn “as one of the true growth leaders of our industry,” new CEO Scott Yara said in a company blog post.
“It’s a bummer, because we hired people with certain skillsets and as the product evolved, it wasn’t the best use of resources,” Otto said. “We had too many people with enterprise backgrounds – and the world’s in a weird place right now. In terms of cash runway, we have plenty, but we don’t know how long we’re going to be in whatever this (downturn) is. We had to make the call, and that’s on Scott and me not anticipating this better.”
In terms of company leadership, Otto said the decision to move to a single CEO has been a topic of discussion for the last year or so.
When Otto took the helm of Astronomer in 2018, he was already once retired. The Cincinnati native’s last two career stints included California-based Greenplum, which was acquired in 2010, and Alpine Data Labs, a developer of web-based data-analysis software, where he served as CEO.
Astronomer, at that juncture, was somewhat “stuck.” It needed the right leader to take it to the next level.
The company became more integrated with Airflow, an open-source platform for data engineering pipelines.
“The world now sees Astronomer as its leading authority,” Otto said. Airflow is downloaded more than 12 million times each month, and Astronomer engineers represent 16 of the top 25 all-time contributors to the platform.
The company bulked up staff. In total, it’s raised nearly $290 million in venture capital, per Courier research, ranking it as a rare Cincinnati startup unicorn.
“I got involved in a Cincinnati company because I wanted to help a Cincinnati company,” Otto said. “I was never here for the long haul. This has been a labor of love, and we’ve built something special. But as this thing starts scaling, which is where we are now, I don’t have the years. My ability to be part of the journey for the next five years is not there.”
Otto has known Yara for 16 years, and the two have recently been serving as co-CEOs. “Having him involved was perfect for us. It was a gift,” Otto said.
Yara first joined Astronomer’s board in early 2020, when he personally invested in the company (“a big day for us,” Otto said). Yara soon after joined Palo Alto-based Sutter Hill Ventures as a managing director. Sutter Hill participated in Astronomer’s unannounced Series B fundraise and its most recent Series C, the $213 million round from March.
While it’s atypical for a venture firm’s managing director to take the helm of a portfolio company, Otto said Sutter Hill’s model supports that approach. He called Yara a “brilliant product strategist and an inspirational leader.”
Sutter Hill also adds “legendary expertise in developing young companies.” Sutter Hill led investments in Snowflake, which raised $3.4 billion with its 2020 initial public offering; Sumo Logi; and Lacework, which has raised $1.9 billion, among others.
While Astronomer maintains a remote-first approach, meaning it doesn’t have a classic headquarters location, Otto said Cincinnati will remain “a part of Astronomer's story no matter what.” The company currently holds office at the Strietmann Center.
Otto also will continue to call Cincinnati home. He said he would remain active in the company in his board role. At some point, he wants to do something similar to what he did with Astronomer, but that’s a conversation for another day, he said.
“What we’ve accomplished over the last four years is a miracle,” Otto said. “We built something here, and I’m excited and grateful for that.”
