Up and Comers in Social Media - Granite Grok

Up and Comers in Social Media

Up and Comers in Social Media

There are up and comers in the world of social media. The world of social media is dominated by companies like Facebook, Snapchat and Twitter. But that hasn’t stopped new startups from trying to carve out market niches.

They are going after areas where they think the sector’s giants have fallen short.

What are their Niches

These emerging social media firms know they face long odds. They are jumping into a market where a few players command most of the attention. They are aiming to establish themselves by emphasizing features that might attract younger users.

New types of social network startups focus on younger users and intimate social groups. Their hope is to capture a small slice of the market. New entrants to the social media sector might not have an easy time raising money. That is largely because of Facebook’s dominant market share.

There were only 107 venture capital deals in U.S. social and communication software in 2018. That is down 44% from 245 deals in 2013 when Snapchat raised its Series A round. Or so the information from the research firm PitchBook prepared for The Information says.

Why is it worth the risk

Ben Rubin, founder of the live video apps Houseparty and Meerkat said, “It’s rough out there for a social founder… Markets always go through periods where they centralize and they decentralize. Right now we’re in this concentration era.” Rubin is an entrepreneur in residence at Benchmark.

Despite the slowdown in deals, investors say promising startups get noticed. One reason is the growing scrutiny of Facebook by regulators. There are multiple antitrust investigations in the U.S. There is pressure on Facebook to not abuse its dominant market position. This could give more startups the opportunity to grow without as great a threat from Facebook. The scrutiny might reduce its appetite for developing similar products.

Niko Bonatsos, managing director of General Catalyst says, The next Facebook isn’t going to look like Facebook… Also, Facebook can’t continue to acquire itself to success. They are loath to acquire anything that looks feels or sounds like a social network; for antitrust reasons. It can of course continue to copy others that seem to have escape velocity.

Things to come

In pieces to come we will discuss four very young companies making mobile software. Their software is primarily social and communications-based. That is as opposed to those that are driven by passive media consumption. None has raised money beyond a seed round. All of them are growing, still have relatively small user bases and have yet to make money from their apps. Stay tuned,there for: Up and Comers in the World of Social Media.