Do you want to know how to build a fifty million dollar startup in less than six months? The answer is Secret, an app that lets you share “what you are thinking and feeling” secretly with your friends. After launching and being disruptive in a matter of months, the company has closed a seed stage in December (two months from the launch), raising $1.43M, and a $10M round yesterday at a $50M valuation.
Google Ventures that was involved in the seed stage seems to be part of this round too. The valuation, given the lifetime and the fact that the app is only available in US and Canada on iOS, is crazy and make us reflect on how simplicity and virality matter when it comes to “invest”. This idea comes exactly in a period where privacy and anonymity are what we want to hear about. However, the product targets those people who want to share what they are thinking, not because they don’t want to get caught by the NSA, but because they want to do it without their name on it.
Facebook is too much and for those who desperately feel the need to share, share, share, Secret is the answer. The only problem with a free and anonymous wall is that the users can literally write whatever they want. You can find jokes, personal secrets and even a bit of sexual arrassment. If we have to describe Secret in a sentence, the closest thing would be “it looks like a public toilet.”
It’s true and that’s why the idea is so disruptive. This generation lives in a world where the only thing that matters is “sharing”, but when you share on Facebook, you need to be cool; so what if we create a place where people can do the same thing, with their friends, but in a secret way? The answer is here and has already got a million dollar valuation.
As the CEO has recently mentioned, only between 10%-20% of its user base are actually sharing content; which means the remaining 80% is there looking at the feed and laughing. Yes, because Secret is not just the place to share, but it’s also the place to waste your time by reading funny things about your circles.
When you build something that creates user engagement, no matter it’s useful or not, you get a million dollar valuation. The idea behind Secret is pretty simple and straightforward, but now the question is “are we facing a trend or a sustainable business?”. It’s the same question that we have tried to answer with Snapchat, Instagram and many other services that are still alive and waiting for an acquisition.
Instagram was able to get out from this “loop” by getting acquired and starting to make money thanks to the Facebook’s infrastructure. Snapchat will be forced to because behind simple and random pictures, there is just speculation and a company who’s willing to raise more than $123M to let its users share and draw penises on pictures.
Seceret, even though it’s just 6 months old, faces the same issue. “We don’t even know what the thing is yet, how big it can get, how far it can go”. What we know is that the app is cool and the user engagement is growing day by day, because people love reading secrets and sharing them. This company is not even looking at its valuation, because as the fictional Sean parker character in The Social Networks says: “A million dollar isn’t cool, do you know what’s cool?”.
A billion dollar valuation. I personally think this app can get in that circle without making a single dollar in revenue. Why? Investors love looking at numbers and the apps has got all the numbers, plus it comes at the right moment, while we are all talking about privacy. An easy acquisition might be what Google Venture is thinking, since you can’t build a business on a “public toilet”.
In the next months, we’ll see how this company is going to pivot or build its product. We haven’t still seen the app in Europe and on Google Play, so there is a lot to work on and a nice funding that can help them.