Lytro to layoff employees, despite the new funding of $50 million

By | February 26, 2015

Lytro, the startup that introduced an innovative light field camera to consumers three years ago, is itself apparently changing focus. Lytro’s luck took a serious turn for the worse on Wednesday. The photography startup has reportedly raised $50 million in new funding but will also lay off 50 out of 130 employees.

Lytro camera

Lytro plans to use the new funding from GSV Captial to make a strategic shift, taking its signature light-field technology into new areas, including video and virtual reality.

The photography startup made headlines in 2011 with a rectangular-shaped camera resembling a mini-telescope more than traditional point-and-shoot devices. Still, the real game-changer ought to have been its se of ‘light-field’ technology, promising more vibrant photos and the ability to let users refocus images after they have taken – a first for consumer cameras.

However, the camera never lived up to the hype, producing small grainy images that did not justify its price of $399. Lytro tried again last May, but instead of lowering the price, it aimed even higher. The eye-gouging Illum ($1,599) looked more like a conventional camera and snapped much better photos. Some months later, it rolled out a $20,000 developers kit meant to woo enterprise customers.

When studied why the company pivoted, some sources explained there seemed to be a lot going on behind the scenes at Lytro. “It’s as though the company finally realized they shouldn’t even be selling something like the ILLUM yet. The tech is really great, but it was still a tester camera to me. Nothing more than a public sample. Maybe they are finally really focusing on what they should be focusing on. However I feel bad for everyone who I personally have seen work tirelessly on a product that is being abandoned, and worse, for those being laid off because of it. The VP of Marketing (Azmat Ali) was trying to push the direction of the business with a product that wasn’t ready.”

Lytro spent a considerable amount of capital on building relationships in the digital imaging industry, but in the end supposedly squandered them. The company did hire some very talented photographers to promote the ILLUM. But many described, it was a photography company run by a group of engineers focused on the tech, not the usage. The opinions and suggestions of the photographers were ridiculed and scoffed as if do not have the understanding of the market reality and the engineers with no photography knowledge were better suited for the task.

Not every impressive technology is meant for greatness. And if Lytro can’t find a great problem to solve, it may as well not exist. But sometimes, a technology is so cool that you can’t help but get a little bit emotionally attached. Come on Lytro, won’t you please pull through?