A billion dollar idea we could all have had - TROVE
December 20, 2014
At the beginning of 2014 the Wall Street Journal did some analysis and released a report that showed 30 start-ups from the United States, Europe and China that had already been valued at more than $1 Billion (USD) and some of them are amongst the most innovative, yet simple, business ideas you could possibly come up with and, more or less, all of them are innovations across an existing product or platform.
In this learning bite we will cover what it does, who they are, what the value as well as financial model and end with some lessons you can learn:
What is Trove? Put simply it’s a social media feed for news junkies who can essentially get all of their news and information through one simple APP without having to be connected to a multiple of separate sites. The great thing about it is you can identify what you want to see by selecting filters that pretty much act as your favourites feed in the same way as if you were setting a folder up on the toolbar of your desktop (of course this is much more sophisticated and begs the question as to why you would bother with a browser such as Explorer or Chrome). We are assuming that the name comes from the use of the word in the phrase “treasure trove” which gives people an instant connection with the concept – after all we all have our own personal treasure troves don’t we? So not a bad name at all in terms of resonation with a consumer market.
The really interesting thing about Trove is the ability of users to create their own Troves and attract followers. This is where Twitter kind of began where users can create lists where people are able to join (or annoyingly add you) and now where a platform such as Pinterest has evolved to which allows you to create a pin folder and allow others to follow and “pin” the shares or posts on their own walls. A lesson is to take something someone is already doing and basically innovate on top of it.
Of course, like most new applications you can sign in using some sort of existing username and password, commonly a Facebook or Twitter user name (sometimes LinkedIn). This again follows the same method used by Pinterest and others.
A lesson in that approach is less of a need to have duplicated processes to organise and keep track of a myriad of usernames and passwords that was a common feature in most (unfriendly) consumer based applications in the early 2000’s. Why is that important?
Because it lowers the cost of both security and infrastructure to run the App which means you can have a relatively high end margin and low cost base.
Like most Apps it evolves and innovates as its user base increases and trends begin to emerge. For example, most Apps are launched that a slow moving but become faster as the user experience begins to influence development.
At the time of writing the new version was 2.2.3 and while there were the good old bug fixes there have been major speed improvements and a beefed up search function for what are known as curators (a curator being someone who owns a trove or is a former journo with a pre-existing following). The curator concept is actually a pretty good one given they are fairly well known people who have their own followings that the new business can take advantage of (of course if I were these guys I’d want to have had some form of ownership) and therein lies another great lesson – have people “contribute” on your behalf, post to their pre-existing followers which means you have the potential to grow your audience just as fast organically as opposed to straight out (and costly in both material and cost means) by acquisition. This is where contagion takes over at a point when your audience number reaches scale.
Who is behind Trove? Trove was launched in early 2014 by the team behind the former Washington Post and is the first (in what we hope will be more) product by Graham Holdings. The company was formed by Donald Graham in the aftermath of the sale of the Washington Post to Amazon gazillionaire (ok billionaire but we have always wanted to use the word “gazillion”) Jeff Bezos. Now I guess a lesson Jeff could use right about now is to try and retain talent like Donald and the team or at least go and invest in them!
How could it be valued? Now this is a lesson for all budding entrepreneurs! While we don’t exactly know what the financial model is we are going to assume it could be similar to that of a subscription framework that eventually sees a valuation placed on each subscriber or user. This is fairly much the same as Facebook and WhatsApp and we know how much those organisations are worth! So if you were to try and get an App up and running that is going to turn into a billion dollar payday you want to try and make sure that you reach an initial golden number of between 50,000 – 100,000 subscribers backed up by a strong online marketing and audience development strategy in the initial build phase.
As at the 11th of June Trive had 108,000 Twitter followers and if you make a basic assumptive calculation that each of those people (or tweeters) had a minimum of 100 followers each you are in fact looking at a potential audience of more than 10 million. This is where you need to know a little bit about creating contagion as opposed to a viral post or marketing campaign (more on that in a later article) because put simply viral campaigns are good for point in time building but you never sustain an audience built off a single post – whereas contagion means the downstream impact of what you post or put out there takes over a sustained life of its own over a multiple of posts.
So what is Trove?An creative innovation on an existing product and service using traditional content gathering methods (journalists) aligned with the ability of each subscriber to potentially build a library (trove) of their own and, therefore, building their own follower base which will ultimately lead them to bringing on new subscribers as they post across their own social media platforms (cheap form of sales team as well as contagion) using a word that resonate with everyone.
By the way, if you search on the Apple App store (iPhone) the App that comes up next in sequence is for Pirate Speak – I guess the treasure notion isn’t so far removed from the odd bit of piracy now is it? And yes – I am a user and I love it because I think I am the biggest news junkie out there!
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