Starting a Social Media Company: Ideas and Innovation

The social media industry already has some tech giants.  Google, Facebook and Instagram are to name a few among of them.  Each of these giants have a tremendous popularity among the people which is evident by the number of subscribers these tech giants enjoy.  These facts may look intimidating and discouraging for prospective entrepreneurs who are thinking about starting their own social media platform.  However, the key to success in social media industry is not proprietary to any company.  In fact, each and every individual has the capacity to write their own rules for success or failure in social media industry.  The social media platforms that are currently available in the market are some creative mind’s brain child.  Even though some of these companies have been acquired by larger companies, the acquired company still remains someone’s brain child.

Let’s take the example of YouTube that was acquired by Google.  YouTube was created by three former employees of PayPal.  A platform that allows users to upload and share video content, the people behind You tube’s creation were duly rewarded when Google bought it in November 2006 for a whooping US $1.65 billion and that too within a period of year and half since its creation.  As said initially, the secret behind the success of this application is purely the creativity and innovation the trio were able to bring to audience.  Let’s take another example to support this context.  Facebook website launched on February 4th 2004 had a very small beginning initially, which was to be a platform for communication among the Harvard students.  As of March 2016, Facebook has a staggering number of 1.65 billion monthly active users.  Facebook also went for its Initial Public Offering in February 2012.  All this success of Facebook was not overnight and the reason for success is not luck as well.  There are great creative minds behind Facebook who defined its success story. Myspace was already available in the market during the time of launch of Facebook.  However, this didn’t stop Facebook in surpassing the Myspace’s subscriber number within a span of few years.

Entrepreneurs should need to be consistently creative and innovative while launching social media platforms.  Unlike traditional business, the audience in social media industry are varied with variety of likes and dislikes and the process of identifying the likes and dislikes of these wide variety of audience is a daunting task.  Hence, creativity and innovation is the only approach to design an application that meets the taste of such a wide diaspora of audience.

Patrick Mackaronis is the CEO and Founder of social media up-and-comer Brabble. You can connect with Patrick on TwitterFacebook, and LinkedIn, or on his website patrickmackaronis.com.

Starting a Social Media Company: Research and Due Diligence

Creating a social media platform and achieving success with it is not an overnight task.  It requires lot of dedicated time, effort and commitment that is backed by research and analysis.  Social media like any other business requires a thorough research in its market segment right from the incubation period.  This is more required than ever considering the fact that the social media market is at the verge of reaching the saturation point.  Prospective entrepreneurs need to gather credible information from various sources such as market research companies to get the pulse of the audience in the particular market of launch.  A credible research information will provide great insight into the various characteristics of the audience such as the volume of the audience, their age and their online habits such as their preferred device to access internet etc.  All this information proves vital in determining the customer base, the kind of features that the startup social media platform needs to have etc.

For example, a social media startup targeting medical professionals will have entirely different features than the one that is targeting college going students. The one related to medical professionals may have features such as buying and selling medical equipment. It may even have a platform for business professionals who are into the medical equipment manufacturing industry.  On the other hand the social media platform that is targeting college going students may have a platform for online book sellers to sell subject related books.  All this information related to the likes and dislikes of target audience can only be determined by a deep analysis of credible information that can only be obtained by authentic research effort.

The research effort that is associated with social media startup companies is not a limited time effort.  These research tasks may need to be taken up every now and then.  Once the startup social media company is established, there could be plans for expansion of the company.  The company may want to add some new features to the application or it may want to enter into a different market segment altogether.  In such situations, the company needs to take up the research activity again to gain understanding of the new market.   Even when the company gets into an acquisition deal with a larger company, the company needs to do its homework to evaluate and arrive at an estimated worth of itself to quote a profitable sale price.

Patrick Mackaronis is the CEO and Founder of social media up-and-comer Brabble. You can connect with Patrick on TwitterFacebook, and LinkedIn, or on his website patrickmackaronis.com.

Starting a Social Media Company: Adding E-Commerce To The Mix

E-commerce in social media is another strategy that startup social media platforms can follow. This strategy not only generates revenue but also increases the penetration of the social media platform among both businesses and users.  Let’s take the example of Pinterest called as the “Catalog of Ideas” by its CEO Ben Silbermann.  The platform which doesn’t charge any fee for registration, allows users to upload, save, modify images called as pins.  Businesses can pin their product images, market their products and can have a virtual storefront.  Studies have shown that Pinterest is more successful in driving sales than any other social media. Business analysts have indicated that ads on Pinterest were successful in generating as much as $500 million in the year 2016 which is an impressive amount of revenue generated by a social media microblogging site.

Businesses have seen the potential that a social media platform like Pinterest can bring to their sales.  The concept of benefitting the entire diaspora of user base which could include businesses, consumers and working professionals etc. brought immense popularity within a short span of time.  Let’s review another example that falls into the same category. Started in 2007 and taken over by Yahoo since 2013, Tumblr is a social networking cum microblogging site.  Users can post multimedia content and associate it with short form of blog.  The picture along with the content make the posts appealing and draws user’s attention.  As of January 2016, Tumblr has attracted over 555 million monthly visitors.

Tumblr has also drawn the attention of investors. Noticing the potential of this microblogging site, various investors have funded an approximate amount of $125 million.  The service is immensely popular among the teen and college-aged user segments as half of its user base are under the age of 25.  A staggering number of 38 million posts were created in Tumblr as of January 1st 2017.  Tumblr allowed advertising on their platform since May 2012 and if we have to go by the words of the CEO David Karp, it made $13 million in revenue in the year 2012.  Definitely not a bad amount of revenue for a microblogging site.  All this proves that there is no one defined way for success in social media industry.  One has to try various innovative approaches with an objective to gain more visitors.  With more visitors and increased popularity, the social media platform will be able to make more business.

Patrick Mackaronis is the CEO and Founder of social media up-and-comer Brabble. You can connect with Patrick on TwitterFacebook, and LinkedIn, or on his website patrickmackaronis.com.

Starting a Social Media Company: Revenue Generation

The objective of any business in any industry is to make profit for its sustenance and to reach a stage where the owners and shareholders also get profited.  Social media companies come up with various new and innovative ways to generate revenue out of their business.  The main channel of generating revenue in the virtual world is advertising.  The fact that social media ad business will likely cross $35 billion in 2017 proves the potential of this business.  Another strategy of earning revenue for social media companies is to start the company, garner enough user base and after gaining popularity, sell the company to a larger company. There is more than one company that falls into the second category.

Let’s review the first strategy of earning money which is by way of posting sponsors ads.  This is a good strategy that can adopted by social media startup companies.  Companies analyze the demographics of its users and try to understand their behavior, likes and dislikes.  This valuable user information proves resourceful for companies as based on this data, they post ads that are closely relevant to them.  Social media platforms charge companies for posing the ads.  The type of ad and type of product/service that is being offered determines the cost associated with posting the ad.  While using the social media platform if a user clicks on the ad and gets redirected to the particular product/service website, there could be extra commission that will be paid by the particular company based on whether or not a purchase has been made by the user.  Startup social media platforms should adopt this strategy and take advantage of this revenue generation channel.

Now that we have discussed enough about generating revenue by way of posting ads, let’s review the strategy involved in creating a social media startup company and selling it for profit after it successfully gains large number of subscriptions.   Let’s review this by taking YouTube as an example.  YouTube was started by three former PayPal employees in 2005.  It was purchased by Google in 2006 for US $1.6 billion.  YouTube has been a ‘go to’ platform for free videos. It generates revenue via the Google’s targeted ad program called Google AdSense.  Also, Google has premium ad free video streaming service where the user is provided with video content for a fee. The immense popularity of YouTube within a short span of a year attracted giant company like Google and ultimately led to its purchase.

Patrick Mackaronis is the CEO and Founder of social media up-and-comer Brabble. You can connect with Patrick on TwitterFacebook, and LinkedIn, or on his website patrickmackaronis.com.

Starting a Social Media Company: Security and Privacy

Virtual world is an unrestricted platform where there is no authenticity check with regards to a person’s claims about his age, sex and ethnicity etc.  Hence, security is an essential feature that needs be incorporated by any social media platform startup.  With that in mind, let’s do a deep dive into the need for security in social media platforms and how to achieve it. YouTube is a wonderful platform to share videos with audience.  However, some of the videos may contain explicit sexual content or extreme profanity that may not suit a particular set of audience.  Hence, access restrictions were set in place to prohibit availability of such content to unsuitable audience.

Security and privacy go hand in hand. Especially, in social media where people irrespective of their age, sex, caste and ethnicity etc. get an opportunity to interact with each other.  In these kind of virtual environments, users should have the ability to decide what personal information of them can be visible to others and what information cannot be.  Let’s take the example of Facebook in this context.  Facebook has the integrated chat feature wherein people can interact with each other via the chat Messenger.  User has been provided the choice to manage his status such that he can be visible or he can remain in invisible state.  He also has the option to block people with whom he doesn’t want to interact or totally turn off the chat window itself.  Features such as these provide confidence among the users about their privacy.

Further, entrepreneurs also need to ensure that the platform is foolproof of any unethical and antisocial activities such as stealing of user information.  There were multiple instances in the recent past where user data was stolen from Twitter.  This not only created a huge cry in the media about the hack but it also highlighted the loopholes or poor management of sensitive user data by a reputed social media platform like Twitter.  Furthermore, it was a great trauma and embarrassment for people who had their personal information stolen. Instances such as these shake the little confidence and rise the apprehensions about social media among the people.  Hence, startup social media platforms need to set preventive security measures in place to thwart any illegal activity such as stealing of user data.  The process of managing security and privacy of social media platforms is not a one-time effort as for every preventive security measure that companies design, antisocial elements will try to find a loophole.

Patrick Mackaronis is the CEO and Founder of social media up-and-comer Brabble. You can connect with Patrick on TwitterFacebook, and LinkedIn, or on his website patrickmackaronis.com.

Starting a Social Media Company: Platform Simplicity

Simplicity is a key feature that attracts users.  The fact that most of the platforms do not have separate tutorials that deal with their usability proves that social media platforms need to be designed in such a manner that they are simple to use.  Accessing YouTube and viewing a video does not require any tutorial and a person with a basic internet knowledge can login into YouTube and access a video of his choice. Likewise, chatting on Facebook also doesn’t need any tutorial.  Simplicity is the ingredient that defines the success of any social media platform.  Myspace enjoyed quite a popularity during its days before the birth of Facebook.  The success of Myspace can be attributed to its monopoly in the social media segment at that point of time.  Moreover, people weren’t aware of how a clean and fresh user interface looks like until the arrival of Facebook.

After the launch of Facebook, people couldn’t withstand the unintuitive interface that is totally filled with ads and the cluttered design.  Facebook clearly dominated Myspace with its clean and sleek design that instantly grabbed the attention of users.  However, in the recent past, Facebook also seems to follow the band wagon of Myspace by filling its interface with sponsored ads.  Inviting sponsors and posting their ads for revenue generation may help companies in the short run but they have no hope in the long run.

Startup social media companies, should aim for the long term benefits that a sleek and clean interface can provide to its users.  YouTube is a good example in this context.  YouTube has a premium service which is called the YouTube Red that streams ad free content for a subscription fee.  The regular YouTube videos have ads in between the content. There are different types of ads based on the type of content.  There are full screen ads for some content and there are the banner ads at the bottom of the screen that get displayed for particular type of content.  Google’s simplicity is evident in the way these ads are posted.  The ads are more or less relevant to the content that is being played on the screen.  Also, Google takes regular feedback from user about the kind of ads he/she is interested in watching.  Even though these ads are annoying for user they are essential for revenue generation.  Google has made it less annoying by way of posting relevant ads and positioning them at less prominent areas. With all the above examples, there is no doubt that users always welcome a simple and clean user interface that is intuitive and not cluttered.

Patrick Mackaronis is the CEO and Founder of social media up-and-comer Brabble. You can connect with Patrick on TwitterFacebook, and LinkedIn, or on his website patrickmackaronis.com.

Starting a Social Media Company: Innovation as a Success Factor

Innovation is another key element to success in every industry. In Social media platforms the penetration, sustenance and long term survival are totally dependent on the innovation factor.  The competition in social media industry is only increasing day by day and it is only by innovation that any startup company can survive.  Innovation in social media platform could be related to the usability, the interface or the application itself.  For the sake of discussing innovation, we will take the example of Instagram.  There are various innovative features that Instagram has launched that proved worthy in its success.  For example, the weekend hashtag project launched by Instagram community wherein the community team designates a particular theme and hashtag for a week and users are encouraged to post photographs has been a huge success.

Let us review some more examples that strongly support the need for innovation in social media platform. Facebook’s newsfeed is a key innovative feature that needs to be discussed at this point of time.  The newsfeed feature has been there since the beginning.  However, the newsfeed has been modified such that now users have the ability to mark the news less or more important as per their choice and the news stories will adapt accordingly. Another important feature that is worthy of discussion here is the ‘timeline’ feature.  Not many people are aware that we now have the ability to go back in timeline and add pictures from the past when Facebook was not born.  Obviously, these pictures can be shared with families or friends as per user’s choice.  Facebook messenger is another innovative feature that it has incorporated within its social media platform.  The feature provides an environment to chat with friends, colleagues, acquaintances and relatives etc.  With a user base of 1,000,000,000 as of September 2016, the feature was very well received by users.

Any discussion related to innovation is incomplete if we don’t talk about Google.  Google has been a synonym for innovation.  Originally created by PayPal employees, Google bought YouTube in November 2006. Created as a platform to share videos, YouTube has evolved since then.  Currently, YouTube not only serves as a platform to share videos but has become an income generator for lot of people through ads posting.  YouTube has also become a major revenue generator for the entertainment industry through its premium YouTube Red service wherein it facilitates streaming of exclusive content that is ad free with offline video playback enabled.  With its 1.5 million subscribers as of November 2016 and a further million on a free-trial basis, the popularity of YouTube Red is ever growing.

Patrick Mackaronis is the CEO and Founder of social media up-and-comer Brabble. You can connect with Patrick on TwitterFacebook, and LinkedIn, or on his website patrickmackaronis.com.

Starting a Social Media Company: The Look and Appeal

The saying ‘a picture is worth a thousand words’ applies to every industry including social media platform.  People visit social media platforms with the main objective of interacting with friends, relatives and colleagues etc.  Visibility and appeal makes one feel like coming back to platform again and again.  Humans are visual creatures.  Anything that looks beautiful draws the attention of people.  Hence, entrepreneurs need to give much importance to visibility and appeal of the social media platform in such a way that each and every individual interaction of user becomes a cherished moment on the social media platform.

Let’s take the case of Instagram and understand how the visibility factor helped Instagram in securing 500,000,000 users as of September 2016.  As we know, a mobile photo-sharing site, people use Instagram to share pictures and videos with others.  Launched in October 2010, the popularity of Instagram grew multifold within a short span of two years.  The fact that it was acquired by Facebook for US $1 billion in 2012 which is only two years from its launch speaks for the success of this social media platform.  It is no brainer that the visual factor in this platform has played a critical role in its success.  People throng Instagram for the visually stunning photos that are available on its platform.  It is not just the content but the user interface also plays a vital role in attracting large customer base.

Statistics prove that a colorful and vibrant user interface has more success rate in attracting users than a dull and plain user interface.  Let’s take another example which is Craigslist.  Craigslist is good at serving the purpose but it has absolutely no visual appeal at all.  The design is dull and all the more boring.  If one has to choose between Craigslist and Airbnb for their design, he/she will absolutely go for Airbnb.  The logic is pretty simple which is that Airbnb has a visually stunning interface with loads of pictures that greet the user as soon as they access the site.  A site with more fashionable, visually appealing and vibrant user interface has higher chances of success of penetration and retention of users than a social media site that has the quite opposite features.  Now the question may arise as to how to keep the interface visually stunning.  Entrepreneurs can hire good and reputed designers who can assist them in these matters.  They can apply a beautiful and visually stunning user interface that is not only appealing but attractive as well.

Patrick Mackaronis is the CEO and Founder of social media up-and-comer Brabble. You can connect with Patrick on TwitterFacebook, and LinkedIn, or on his website patrickmackaronis.com.

Starting a Social Media Company: Platform Accessibility

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Accessibility is a key factor in determining the success of social media platforms.  When we talk about the accessibility, we are trying to understand whether the social media platform is a standalone application, web enabled and mobile device compatible etc.  Since, accessibility is a key factor in determining the success of the platform, the platform needs to be more scalable.  The platform should be available as a standalone application so that people can access the platform by installing the required software and launching it on a PC or laptop.  The platform should also be web enabled to cater to those people who are more inclined towards launching the platform in a web browser.  Lastly, the platform should also have an app to cater to people who want to quickly access their account on the go on their mobile devices.

There is no exaggeration in saying that mobile phone has become a technological extension of human body. Entrepreneurs should take advantage of this increased penetration of the mobile devices.  Statistics indicate that social media platforms that have mobile apps are more popular than those that lack mobile applications.  Take the example of Facebook, 90% of Facebook’s daily active users access it via mobile devices.  When we talk about mobile apps, we also need to discuss about iOS and android platforms.  While a large number of players, have their apps built and made available on android play store as well as iOS, some of them restrict themselves to android.  The reasons for this could be multitude such as development cost, support and market share etc.  However, entrepreneurs need not be modest in capital investment at least in the launch phase of the social media platform.  It is an undeniable fact that android is leading the smart phone industry with 86.2% market base, while Apple with a market share of 82.2% is not lagging far behind.  This proves that both the android market as well as the iOS market are critical for the success of social media platform.

Also, while developing the apps and standalone applications for social media platforms, social media platform developers should make sure to retain the similarity of the features across the apps and standalone application.  The reason for the need to keep features similar across the apps and application is to provide a seamless experience to users irrespective of the device they are accessing the social media platform.

Patrick Mackaronis is the CEO and Founder of social media up-and-comer Brabble. You can connect with Patrick on TwitterFacebook, and LinkedIn, or on his website patrickmackaronis.com.

Starting a Social Media Company: Importance of Platform Reach

patrick mackaronis

Internet has created various new avenues of sharing information, interests, and ideas etc. which were unthinkable and unimaginable of a decade back.  ‘Social media’ is the buzzword of the day among people across ages in the present day scenario.  These computer-mediated technologies not only allow users to interact with each other but also facilitate sharing of content such as pictures, videos etc.

There are varied kind of social media that cater to different kind of segment of audience.  Several critical factors determine the success or failure of the social media platform.  The ‘reach’ of the platform is one among the several important factors that determine the business potential.  When we are discussing about the reach of the platform, we need to discuss about the target audience.  The target audience could be students or working professionals or it could be anyone who have access to internet.  Statistics show that platforms that have access to wider network of audience have more business volume than those that are limited to a particular segment.

Let’s take the example of Facebook.  With 1,590 million users as of April 2016, Facebook is way ahead in its reach among its peers.  The increased penetration of Facebook can be attributed to its wider reach of audience.  On the other hand, if we take the case of LinkedIn, it targets only a particular segment of people which is the working professionals.  With over 100 million users as of April 2016, LinkedIn is in the bottom of the social media rank list.   The vast difference in subscriber base of Facebook and LinkedIn proves that target audience plays a critical role in determining the business volume of social media platforms.

As with any business venture, one should tread cautiously and test the waters before launching a social media platform.  Prospective entrepreneurs should research and garner statistical information to understand the usage habits of social media platforms.  This background research will not only prove resourceful in determining the audience segment but will also be helpful in understanding various characteristics such as ‘how much time they are spending on the social media platform’, ‘what is the most used feature in the platform’ and the content if any that is being shared through the platform.  Understanding these characteristics will help prospective entrepreneurs to develop the required features that need to be incorporated within the platform.

Patrick Mackaronis is the CEO and Founder of social media up-and-comer Brabble. You can connect with Patrick on TwitterFacebook, and LinkedIn, or on his website patrickmackaronis.com.