Secret raises $8.6 million Series A
recode.netIt's a beautifully designed app with tons of attention of detail to tiny little things.
How the hell you monetize it to turn $8.6m in to an even bigger pile of cash is beyond me though.
I guess that's why i'm not an entrepreneur.
It used to be that investors said "I want a part of the next Compaq". Then it was "the next Google".
What this shows is that investors now want to be a part of the next Instagram or WhatsApp. They are literally throwing away the notion of profitability or monetization. Now the model is to get as popular as possible as quickly as possible. If you win that lottery Facebook or Google will sink BILLIONS of dollars into you.
My bet is these investors are looking at an app that has existed for less than two months and think they are getting in early on the next one of those. I'd love to know what the valuation was (north of $17M at least).
"They are literally throwing away the notion of profitability or monetization."
To be fair Google had no idea how they were going to monetize search for a significant amount of time.
I'd say the pivot is from usefulness / utility to entertainment / novelty.
You realize that WhatsApp has hundreds of millions of dollars of revenue?
Remember, on HN "I and my friends don't use it" implies "that company can't possibly have revenues". Just look at any thread about Yahoo.
Or Microsoft.
The valuation is $50M.
"I guess that's why i'm not an entrepreneur."
Yep. Attention is the most valuable commodity these days and Secret has certainly managed to obtain it. Ad-based monetization would be pretty easy...if they even want to try monetizing before getting much bigger.
Attention?, I think you mean 'eyeballs'.
Please. Eyeballs was so dotcom, attention is so web 2.0, that's not who we are anymore. Now it's all about mindshare, sharing secrets to one another.
You monetize it by doing another cash out round, or getting acquired 1-3 years from now.
I'm with you. I read this article hoping for an explanation of what they might do with the money. I suppose it might be a case of 'raise more than you need' because they are hot right now.
I'm a fan of secret, but where is it going? What is the bigger play? Surely there must be one for > $8 million.
The formula is:
1. Create a new app that's a slight variation of something popular that already exists.
2. Hype it like crazy.
3. Find someone clueless to buy, either a large corporation or have an IPO.
4. Repeat with the next idea.
It's basically the same model for hyping celebrities. Is Lady Gaga popular because she's a great singer, or because the media hypes her all the time? Similarly, is Secret popular because it's good, or because it's being promoted all the time?
Lady Gaga (aka Stefani Germanotta) is actually an incredible musician. She studied at the prestigious NYU Tisch School of the Arts, and was one of the few students given early admission at the age of 17.
It's an ignorant jab to discredit anything popular as being without merit. Loads of people said Facebook was a just silly toy for college kids.
Credentials and Education != talent and ability
I'm judging Lady Gaga based on brief fragments of recent songs I heard. Of course she may be pulling a "Jay Leno", using talent to produce the mediocre garbage that the mainstream media likes to promote.
Also, I DON'T use Facebook and Twitter. I never saw the point. Also, you're an IDIOT to build a web presence on Facebook, because then Facebook controls your ability to interact with your audience. Better to have your own site where your audience follows you directly and you control it 100%.
"I'm judging Lady Gaga based on brief fragments of recent songs I heard."
Well, that seems fair.
I could never stand to watch her for more than 30 seconds, because she's so awful.
"I don't like it, therefore they are awful and untalented"
re: Lady Gaga, hype had something to do with it but she is also a phenomenal musician. Here's a video from before she was famous: https://www.youtube.com/watch?v=NM51qOpwcIM
Let me know when you learned how to "Hype it like crazy".
Thanks
No, this is why Lady Gaga is popular: http://www.nydailynews.com/entertainment/music-arts/lady-gag...
Hype = Money seems to be the take-away lesson to be learned.
Has that ever not been true?
Sadly yes. I just wonder how far to spin it. So rather than hiring good product people, designers and engineers - just build a company out of PR people and hype the shit out of something totally average?
Growth = Money, hype is one way to get growth
Anyone who's used the app can back me up when I say this:
It is one of the most beautifully designed apps I've ever seen. Every interaction adds to the functionality. The balance of beautiful and functional is amazing. Sure, many of the interactions may have been done before in other apps, but it's the whole package that blows me away.
The whole "LOL THEY AINT GON MAKE THE $$$$" is a tired argument. The more interesting conversation to be had centers around the design.
Don't particularly understand why that's a tired argument - I think that's a wise piece of the puzzle for any investor to consider. It's so interesting to hear investors criticize a savvy pitch like crazy then hand over a bucket of money to something like Secret.
It's not an argument, it's a prediction. I welcome them to prove it wrong.
Unfortunately when you take money from someone else, the conversation changes to how much money you're going to make from that initial money.
Secret is basically a news feed. I'm pretty sure news feeds have proven to be heavily monetizable.
Eh, the close button is hard to reach at the top and the gesture that is "back" in other apps is "like."
I can't wait to use it as soon as they make an Android version. They certainly have the budget to now...
It's hard to make anything that people want to open and use every day, that's why I commend the folks behind secret.
Their Monetization strategy? Thats simple ... Blackmail
I kid, I kid, but oh the things they could do lol
They only had to blackmail a couple of investors.
Their monetization strategy is a secret!
Here's the company's blog post on how the service works:
I wonder where the future of 'social' is going. If history is any guide, Facebook will soon be out of the 'cool' factor and younger, nimbler startups with take over. It's not clear to me though what kind of experience these will provide, i.e., what features will attract the next generation and form that critical mass. I do like the social app ecosystem to be fragmented though, it makes for good options and interesting new ideas to be tested.
I think Facebook is already out of the 'cool' factor and has been for a long-time. It has become, as Zuckerberg also likes to point out, a utility. Cool things and fads die out (a la MySpace).
Bubble Alert.
I think investments like these which appear to be the most illogical are the most interesting for venture capital. The more people who thinks that investment seems solid the less likely it is to unearth something entirely new (perhaps a whole market).
I agree that hype is a large part of this investment. But remember that hype is about 1000x as difficult to create than a product.
Hype is harder to create than a product? For what set of products?
Secret may be hugely profitable someday.
Still, as for today, I wonder how we'll know when we've jumped the shark?
Another win for #firstWorldProblem apps. Hell, you could argue that Secret doesn't even solve any problems, and probably creates more.
But damn, that stylish hipster UI and all these cool Silicon Valley cats talking about how they hate Dave Morin....who doesn't want to ride that gravy train?
If you can somehow validate these posted secrets as True of False, then it's worth every penny.