On March 26th, Meerkat announced a $14M acquisition from Venture Capitalists. The app, which allows users to stream video in real-time, had been gaining traction both through press coverage and recent involvement at SXSW.
Meerkat, which reportedly had made $12M prior to investments, was given a $40M valuation, according to Business Insider. Naturally, investors had high hopes for the app’s potential.
The same day Meerkat made its announcement, however, Periscope came into view.
Purchased by Twitter for $100M in January 2015, Periscope was an instant hit. With time to sharpen its edges, Periscope was able to offer features to consumers that were not offered by Meerkat.
For instance, Periscopers can access (and download) clips up to 24 hours after a clip is shared, without the use of additional software. Periscope also has animated hearts and a comment feature designed to appear during the live broadcasts, instantly connecting the live-streamers with their audience.
Reports show Meerkat never made it to the top 100 on the US iPhone download chart, even at its peak. In contrast, Periscope rose to the top 30 just one day after its debut, bumping Meerkat to spot #523.
While this news may be unsettling to Meerkat, it’s also alarming for the VCs involved.
Instead of dwelling on the chaos or asking why this happened, maybe the better question is: how could all of this have been prevented?
Hindsight is 20/20 and it’s likely investors did their research (one would hope!), but where did they dig?
As Ben Rubin, founder of Meerkat, put it, “If you have a good idea and you don’t think there are 10 other smart teams working on it already, then you don’t have a good idea.” As with any rising startup, competition was inevitable; Meerkat was onto something, but they weren’t alone.
Although imperfect, Meerkat was the first app of its kind to have easy, Twitter-accessible, live streaming. Unlike similar-but-different apps like Snapchat (not live), Meerkat’s real-time nature boosted its appeal. Based on social chatter for Meerkat, some consumers noticed blind spots where the app failed to deliver.
As with anything, perfection isn’t possible. Meerkatters expressed concerns including problems with connectivity, an inability to save footage and frustrations with having to film vertically. Admittedly, users acknowledged some of these things as “first world problems,” but these problems can become opportunities.
The term “research” may connote a number and “big data” continues to be a hot topic. When it comes to “likes” on social media, retweets or even projected revenue, there are limitations to numerical data, alone.
While numbers can be useful, they fail to acknowledge the actual voices of people who matter. In the case of a startup, there are at least two voices to consider: that of the consumer and that of potential competition.
The news about Twitter buying Periscope was circulating back in January;
by March, it was nothing new.
Although we can’t erase history or control what people say, Feedback translates it into actionable insights that inform future investments.
by Whitney Cavin, Strategist
with Michael Kessler, Research Specialist