How one “Series A crunched” startup traded user acquisition for dollar acquisition
BY ERIN GRIFFITH
ON DECEMBER 21, 2012
Wendr’s story has a beginning that’s familiar to many a startup. Sam Zises saw a hole in the market for social networking apps. They were great for sharing one’s current activity. But they were awful for making plans for the future. So he built an app that helps friends share their plans with each other. Wendr was a “Foursquare for the future” and it gained modest steam, accumulating users in the tens of thousands.
Unfortunately 10,000 users does not a successful social media app make. Especially when ten million users is the new one million users and a Series A crunch is on. Founder Sam Zises saw the writing on the wall and did what he, as a former brand and business development manager at ad agencies OgilvyEntertainment and Big Fuel, knew best. He went after the big brands.
It worked.
Wendr is now a product of Zises’ agency, [L]earned Media, and he’s white-labeling the app for brands, starting with a BlackBerry campaign in 30 South American, Latin American and Caribbean countries. The app is part of RIM’s BlackBerry Insider program. Blackberry Insider is the a community that includes both exclusive and user generated content for the underground scene in music and nightlife in Latin America. In each of the 30 countries involved, Wendr pulls in events from a user’s phone calendar as well as Facebook events to share a newsfeed of friends’ plans both in the app and in BlackBerry Messenger.
Turning an app into an agency is not a venture capitalist’s dream. But it’s also not a lame soft landing. Zises’ agency is building cool technology that will be used by more people, and he’s getting paid for it. “There’s just so many opportunities for brands to connect with startups,” he says. “The next venture capital is going to be brands.”
It’s a much different chorus than one I’ve heard repeatedly from startups focused on user acquisition. The whole “we’re not your creative agency” thing. Talk to me in a few months when your pre-money company runs out of venture capital — maybe that creative agency gig looks a bit more attractive.
Brand-savvy entrepreneurs who understand advertising from day one will have an easier time monetizing. The marketing world is trickier to navigate than most startups think. Facebook, Twitter, and Instagram have struggled to keep their users happy while courting advertisers. You could argue, that, in light of Facebook’s constant privacy outrages from users and whiny complaints from advertisers, the company has utterly failed on both fronts. Same for Instagram, with Terms of Service-gate this week, and Twitter, with its hostility toward its developer community as it aims to please advertisers.
Now, the next Facebook, Twitter or Instagram might not even make it to a Series A round of funding. We’re in a new paradigm of investing where VCs are hostile to social media startups that are focused on user acquisition and gaga over enterprise software. Investors have been pointing many a young company in Zises’ direction, and he’s advised early stage startups like Makeably, GiftHit andSocialPace on how to be brand-friendly from an early stage. With [L]earned Media’s Blackberry deal (and a deal with Budweiser as the result of winning a pitch contest), Wendr is proof that a young startup with hardly any traction can make money, even if it means white-labeling the product or shifting focus ever-so-slightly. As app overload sets in and a seed-stage shakeout begins, that is a better option than failure.
“For every Instagram or Snapchat out there, how many Wendrs are out there that are making cool products but don’t have that magic fairy dust to get them to a billion picture shares?” Zises asked.
Originally posted on PandoDaily.com on December 21, 2012.
[L]earned Media Launches Branded Content App, Wendr, Featuring Insights on Exclusive Events for BlackBerry Customers in Latin America
FOR IMMEDIATE RELEASE:
Users Can Discover Insider Tips on What’s Happening in Their Cities And Easily Coordinate Plans with Friends
New York, NY — December 21, 2012 — [L]earned Media, the branded content agency that focuses on mobile and social media, today announced the launch of a new social planning application for BlackBerry® smartphones that is part of the BlackBerry Insider program. The app features exclusive, real-‐time information on social events and happenings for BlackBerry customers in Latin America. Along with existing Wendr functionality that lets users discover friends’ nighttime plans, the interactive mobile app spotlights a newsfeed of happenings suggested by BlackBerry “insiders” in Argentina, Brazil, Colombia and Mexico. The app showcases premiere access to popular events in music, fashion, culture and nightlife. Users are also rewarded for active social collaboration, posting, and sharing.
“We’re excited to launch a new social app for BlackBerry customers in Latin America, which is a dynamic, one-‐stop-‐app for making plans and finding out the latest fun and undiscovered things that are happening in their cities,” said Sam Zises, [L]earned Media’s founder and CEO.
The Wendr app pulls in plans from the user’s BlackBerry Calendar as well as their friends’ events from Facebook to provide a detailed newsfeed of relevant nightly events and activities. Users are able to make and share plans with friends privately on Wendr or publically across Facebook. [L]earned Media is developing an upcoming release that will allow users to share their plans on Twitter as well as update their BlackBerry® Messenger (BBMTM) status directly from within the app.
Wendr for BlackBerry smartphones is now available on the BlackBerry App WorldTM storefront: https://appworld.blackberry.com/webstore/content/19205212/?lang=en
For more information about BlackBerry Insider, please visit www.blackberryinsider.com
BlackBerry, RIM, Research In Motion and related trademarks, names and logos are the property of Research In Motion Limited.
How Wendr Evolved Into [L]earned Media
By Jordana Zizmor
Wendr is a smart way to plan your night and see what your friends are doing. Recently, I caught up with founder Sam Zises to talk about Wendr and his new venture [L]earned Media. When Sam noticed that lots of brands wanted to work with Wendr, he evolved the company into an agency that deals with branded content for mobile and social media.
How did you come up with Wendr?
I had the idea for Wendr when I was in college. There was never an app to see what your friends were doing that night. People may text and post on Facebook but there is no centralized way to see what people are doing tonight. Before I started Wendr, I worked at Big Fuel. My partner is Nick Kaye and we met at Big Fuel. We opened the office in August and it took about six months to build it and really refine it. We launched the app in early February at the onset of Social Media Week. In April Ad Age put an article out that said Budweiser wants your startup pitch. So 300 companies applied and six were chosen to go on stage and pitch at the event. We were one of the six and we won.While we were working with Budweiser we also got a call from Blackberry. They are working on a campaign in Latin America that is all about culture and nightlife. Blackberry asked us if they could license the app so we are working on that now. It’s going to be Wendr powered by Blackberry. While all these branded deals have been going on the industry has changed. When we thought of the idea for Wendr there were only a handful of competitors but today there are 50. There are 50 startup apps that all focus on social planning. We decided that we could keep on doing Wendr and bootstrapping it or we could focus on branded content for the companies that are paying us. We basically evolved into a social media and branded content agency. One of our first clients was David Blaine. We designed and developed his website and are working with him.
What do you know now that you wish you knew when you started Wendr?
Before I built Wendr I had a presentation ready for Budweiser. You should be thinking about brand partnerships as you are designing your product.
What advice do you have for startups?
Unless you work for a startup you really have no idea what it takes. For a startup to be successful you need product, traction and revenue. Very few startups get to all three very fast.
What’s going on with Wendr?
Wendr is really becoming more of a product that we sell. Companies are licensing the app so the next step is to see where those partnerships go. An app like Wendr needs organic growth. You need to love it and tell all your friends about it. The main demographic is college kids and it’s not easy to infiltrate that demographic when there are thousands of other apps.
Do you think startups are going to head in this direction because the field is so crowded?
Yes, one of my predictions is that Madison Avenue is going to act more like venture capitalists. Brands are all going to act like venture capitalists because that is where startups get all their money. Startups are going to have to learn to work with brands. Also, lots of tech startups are so focused on their product that they can be close-minded. Some of the feedback we have received from our partners is that they love how open and receptive we are to working with them.
Originally posted on HuffingtonPost.com on December 10, 2012.
The Grab Some Buds Beta-Tester Launch Party
SO…WHAT’S UP?
Budweiser’s giving some lucky individuals early access to Grab Some Buds, the brewmasters’ pre-released iPhone app powered by Wendr that tells you what your friends are doing on any given night based on their Facebook events, statuses, Tweets, and Foursquare check-ins.
WHAT DO I GET FOR BETA-TESTING?
Test-drivers not only get an early go at “finding their night” with this clever app, they’ll also score an invite to the Grab Some Buds Beta-Tester Launch Party on Tuesday, December 4th, an evening featuring a Budweiser-stocked open bar, DJ Sean Glass spinning, models to show you the app’s ins & outs, and more. “Grab Some Buds,” get it? Sure, NOW you do…
HOW DO I GET IN ON IT?
Just drop your deets here for a chance to beta-test the app and score an invite to the party. Whatever else you do to be selected — rubbing Buddha bellies left-and-right, vigorously knocking on wood to the point of splinters, praying really hard that Mercury isn’t in retrograde — is totally up to you.
Originally sent via Thrillist.com on November 27, 2012.
“Foursquare for the future” startup Wendr now a branded content agency
When Wendr launched in July as “Foursquare for the future,” its app was the classic minimally viable product. The company amassed 10,000 users, which is enough to show that the concept is good, but not enough to appeal to brand advertisers, which is Wendr’s ultimate goal.
“There was a bit of empty room syndrome,” founder Sam Zises says of the first version. Wendr shows users what their friends’ plans are for that evening, making it more useful for hangouts than, say, Foursquare, which only tells you what your your friends are doing at that moment.
The company recently launched version 2.0, which is worth a second look. But perhaps more importantly, the company is transitioning beyond its standalone app into a branded content agency.
Called [L]earned Media, the agency will develop products and provide services for both agencies and brands. The company already built a new website for David Blaine in anticipation of his upcoming “Electrified” stunt.
A social media app and a branded content agency are two very different businesses. Sometimes cushy brand jobs are just too good to turn down. Zises comes from that world: He worked at OgilvyEntertainment as Group Marketing & Business Development Manager and did brand development for Big Fuel. His partner Nick Kaye has been an art and creative director at Big Fuel, Dentsu’s 360i, Cheil USA, and Leo Burnett.
He says his investors, which include Jeff Radov, former CFO of About.com and David Moche, Principal of Geek Media, were initially skeptical about the switch-up but have slowly gotten on board with the idea. “While many believe the upside for a tech startup has greater potential IF you hit it big, the chances of ‘hitting it big’ have, in this space in particular become significantly less likely,” Zises wrote in an email.
When he thought of the idea years ago, there were no competitors. When Wendr launched on February, there were about five and today there are several dozen. Now the Foursquare of the now has 25MM users and is hustling to back itself into a good business model. So the lesson is, in a post-Facebook, post-Instagram world, it’s difficult to convince VCs your app will return money.
“We decided to let our competitors play the lottery and we’d take the scenic route to profitability,” Zises wrote.
But back to Wendr. That’s not going anywhere, but it’s safe to say the founders’ attentions will be somewhat divided. Still, version 2.0 just launched and it’s worth a second look. The app now cleverly solves the “empty room syndrome” by pulling future plans from all your friends’ Facebook and Twitter feeds, even if they themselves aren’t using Wendr. If they’ve posted anything regarding their plans for that evening, it shows up in your Wendr app. You can then coordinate with them from there. Using Wendr doesn’t require friends to use Wendr.
Wendr is mostly focused on college students. Which, I’m not sure if you’ve heard, but those kids, with their texting and file sharing and Twitters, are killing the college bar, says the New York Times. Now we can blame Wendr too.
Unlike other plan-making apps such as ChillWith.me, Wendr’s revenue play won’t be for the local dollar. That strategy seems obvious: Of course local vendors would be willing to pay for information about future plans (intent!) and potentially win over customers through an app. But instead of fighting for pennies from local vendors, Wendr will be elephant hunting for big brand dollars.
The business will seek out businesses like movie studios or booze companies who want an audience of people looking for something to do that evening. Wendr already attracted the attention of Samsung and Thrillist when it won the companies’ joint “Speed Dating for Startups” competition. The contest gives the app exposure to Thrillist’s five million email subscribers. Likewise, Wendr wooed A-B Inbev at Ad Age’s Brand Hack contest, winning a $25,000 brand partnership with Budweiser.
The company also signed a brand deal with Research in Motion to develop a co-branded BlackBerry application as part of a marketing campaign in Latin America called BlackBerry Insider.
Zises may have founded a startup, but it’s one that acts a whole lot like an agency. If this wave of startups realizing they need brands, and brands wanting a piece of “innovation,” Zises, Wendr and [L]earned Media will be among the early players that can successfully connect the two.
By Erin Griffith
Originally posted on PandoDaily.com October 22, 2012
