Why the company behind Meerkat ditched livestreaming for video chat
Several months ago, an app called Houseparty quietly appeared in the Apple and Android stores under the name of developer “Alexander Herzick.”
According to his social media profiles, Herzick is a Bay Area venture capitalist with a cut-and-dry rsum and career endorsements from several industry peers.
In reality, he doesn’t exist at least not the public persona of him on display here.
Meerkat chief Ben Rubin and newly hired chief operating officer Sima Sistani dreamt up the character solely for the purposes of misdirection (the real Herzick, who keeps a low social profile, is actually Sistani’s husband).
But it wasn’t long before Herzick’s stellar bonafides and the stylish Snapchat-like app to which they were attached began to attract some attention across the valley.
“During May when we kind of super exploded, he was getting emails from all the venture capitalists in the valley,” Rubin says.
The approach couldn’t be more different than the one that propelled Rubin’s previous venture through a riptide of Silicon Valley buzz last year, helping to ignite an industry-wide live video craze that ultimately pushed its progenitor into the wake of bigger latecomers.
Meerkat first exploded onto the scene of the 2015 South by Southwest festival in Austin, Texas with all the force of something destined to burn too bright and too fast. SXSW had previously been the launchpad for other hot startups including Foursquare and Twitter. It was the kind of buzz that meant big things were ahead.
A favorite among tech journalists, the app soon became a hub for live video of all kinds with a respectable number of users. Weeks later, it parlayed the hype into $12 million in venture funding.
While the strategy might look canny from a public relations or marketing perspective, Rubin says the precipitous rise actually took the company by surprise. He would have preferred a slower burn that would allow for more sustainable growth.
It’s not hard to see why in retrospect. It wasn’t long before Twitter also waded into the mobile livestreaming space with its Periscope app followed shortly by social behemoth Facebook. At that point, the tech press was already writing Meerkat’s obituaries with the same fervor with which it anointed the company an industry darling.
“The live video category wasn’t playing out as we thought it would,” Rubin said. “We started thinking about the majority of people who aren’t comfortable on live what can we do for them?”
So now Rubin is swimming against the stream, making a play with Houseparty a group videochat app with major ambitions while most rivals remain focused on perfecting the tool he helped pioneer.
Meerkat’s lost legacy
Rubin thinks Meerkat’s downfall speaks to more than the ephemerality of the thirsty tech media: Like the product itself, he says, live video’s appeal is fleeting, of use to only a relatively narrow cadre of journalists and celebrities once the initial novelty wears off for the average user.
“It is pretty clear that there is a problem with live right now,” Rubin said. “The reason is because it’s mostly about novelty. It’s easy to mistake if it’s actually a viable product used by millions of users every day.”
Most social networks and many web publishers remain convinced otherwise. Facebook has thrown all of its weight behind its new streaming hub, paying media outlets like BuzzFeed and the New York Times (as well as Mashable) to broadcast regularly while making clear that it has tailored advertising in the works. Despite losing ground to Facebook, Twitter’s Periscope app is still pushing ahead with new sponsored streams and Twitter-like creator incentives. Twitter has also more than doubled down on live content with deals for sports, politics and more.
Early successes like BuzzFeed’s much-watched watermelon debacle and a viral stream from a woman in a Chewbacca mask are seen as encouraging signs.
Forrester research analyst Nick Barber, who specializes in live video and video chat, said the technology still has a ways to go before it peaks in terms of audience, but there is potential.
“It’s not something that millions of people are going to use every day, but certain barriers and certain obstacles can come down and it could be used by millions of people every day,” Barber said.
Part of that potential will come from untapped opportunities outside simple consumer-to-consumer interactions, he says Barber sees the tool eventually being used for enterprise broadcasts in the workplace, medical help and customer service, among other things.
But Barber expects its popularity to also come hand-in-hand with the spread of video chat, which he says is also a burgeoning area.
“Video chat is something that I’m seeing grow,” Barber says. “I went into my research thinking that video chat is really only popular among millennials people who are digital natives and tech savvy and what I found out is that it’s really generation-agnostic.”
Like most social network founders, Rubin has a singular vision for how people should think of the Houseparty app.
He wants it to be more Snapchat than Skype a casual place to hang out rather than a simple utility and the idea is to foster a distinct community scattered throughout chat rooms of up to eight people based on groups of friends or family or shared interests like Facebook groups or subreddits.
In accordance with the app’s casual feel, its interface sports a quirky and emoji-filled character reminiscent of Snapchat without the confusing user controls.
“The thing that I admire most about Snapchat is that they say, ‘All the content out there is formal. We’re going to build the most non-formal medium to support non-formal content and let people be to themselves,” Rubin said. “And I think the same thinking applies to conversation face-to-face over the internet.”
Whereas calling six or seven friends at a time on FaceTime or Google Hangouts might feel like an appointment, or at least take some schedule coordination, Houseparty is intended to serve as an ongoing conversation into which people can drop in and out.
“Nobody’s worried like, ‘Why didn’t you call me?’ ‘Why didn’t you pick up?’ ‘Why is there a missed call?’ ‘Why the fuck aren’t you calling me?’ all of those things about calling that are too formal,” Rubin said. “We want to create a new social contract to just make it okay to be with your friends.”
Much of Snapchat’s appeal is credited to its recognition that, in an era in which social media posts are permanently plastered on the web for all to see, people might crave a little ephemerality between select friends.
Houseparty also shares Snapchat’s mix of public and private posting features rooms can be places where friends of friends meet for the first time, but they can also be set to lock out newcomers with the touch of a button when a friend of a friend enters a room, a banner scrolls down reading “Stranger Danger!”
The idea for the pivot was actually inspired when Rubin asked Sistani what she enjoyed most about Meerkat, and Sistani said she enjoyed broadcasts among family and friends.
A social network of rooms
Above all else, Rubin wants Houseparty to be a social network a business model that entails many considerations beyond those of the average enterprise.
There’s the careful balancing of user interests with the inevitable march towards monetization, the steady-handed regulation of the ethos of the community inhabiting said network and, perhaps most importantly, an eye for striking just the right cultural vein to vault it towards the massive scale it will need to attract advertisers and investors.
Towards that last end, Houseparty has dispatched a contingent of ambassadors to college campuses to explain the app and get young people on board maybe have them start a chat room for a fraternity or sorority or use it for homework help, Rubin suggests.
While the company is ultimately after the aforementioned cross-generational appeal, social networks usually have to first establish themselves as the hot new thing among younger crowds before their parents start to take an interest.
The recruitment team was pleased to find that as the app gained steam, users were actually sticking around past their first few broadcasts.
But the influx of users also strained the fledgling app’s system and put many of its prototype features to the test for the first time.
As the overload threatened to drag down growth, the company decided to put out a user satisfaction survey that provided it with several features users wanted to see, including the lock button and a banner that appears when a phone is shaken. It also took the opportunity to overhaul the interface with a new design informed by feedback and bolster the software to support more users.
It was the first major hurdle in Houseparty’s young life, and the company proved itself resilient. The challenge also provided the sort of learning and growing experience that might have been lost in the whirlwind Meerkat days.
The company still has a “comfortable” windfall left over from funding in its Meerkat days, and it claims the investors that had backed Meerkat then are also still on board.
While Houseparty doesn’t have any plans to make money off its users at such an early stage, Rubin seems to be positioning it in such a way to sell advertisers on targeted interests and a hip millennial or generation-Z crowd.
The social network will probably need more venture capital and vast numbers of new users before it can start to think along those lines. But with growth at a steady clip, it seems to be maturing in a healthier manner than its departed predecessor.
And while departing from the kind of success that once seemed possible with Meerkat can be difficult for entrepreneurs, Rubin doesn’t seem too wistful for what was or might have been.
“This product is not for the celebs,” Rubin said. “It’s the opposite of Meerkat in some senses.”