RocketClub empowers users by giving a startup’s early adopters company shares. And now they have six new companies that real, regular folks can invest in
Not only is it hard to be a musician or journalist these days, it’s increasingly hard to be an app developer. Making a living off your app is a long shot, with 52 percent of developers making less than $1,000 a month. Only 5 percent of apps on the market have revenues of over $500,000 per month.
So what’s an app developer to do? As RocketClub co-founder and CEO Erik Chan puts it, app startups face a “chicken and egg” hurdle.
“They can’t get users without word-of-mouth buzz and social proof, but they can’t get buzz and social proof without users.”
Sure, you can hand over cash to ad networks and app discovery platforms to generate more downloads, but everyone is doing that already. Give away your app for free? Oh yeah, everyone is doing that too.
That’s when Chan and his co-founder Paul Chen had a truly out-of-the-box idea. Why not pay new users and early adopters for using your app? Of course, startups are cash-strapped, but the one thing they have is equity. This incentivizes users to use, promote, and offer feedback on their product.
Of course the relationship has to be formalized. Users must know exactly how much equity they’re getting in exchange for their engagement. For instance, how many people are they expected to share the app with? All of these details are tracked by RocketClub’s platform so that a human being doesn’t have to. It’s like crowd funding, but instead of investing money in a startup, new users invest their time.
A co-op for app users?
In fact, it’s sort of like a co-op, where a subgroup of shoppers (in the example of a food co-op) own shares in the business. However, Erik Chan says his platform is agnostic in terms of how driven its app developers are by cupidity. “They can offer 1 percent equity to users or 50 percent,” he tells Geektime, and they can be purely out to make a buck or conceive themselves a nonprofit. But Chan does say that as soon as a company is 50 percent owned by the crowd, “they become interesting.”
RocketClub, based in San Francisco, recently announced the launch of six new food and travel apps on its platform
“We’re super excited to launch our newest batch of food and travel startups to our quickly growing community.Who wouldn’t want to contribute and become a part of what could be the next TripAdvisor or Blue Bottle?”
RocketClub’s new apps include Spottly, a photo-based travel guide companion app; Banter!, a real-time occupancy app for nightlife; and Noble Brewer, a community network designed for craft beer connoisseurs.
There are currently seven live companies offering equity to early users on RocketClub’s 9-month-old platform. Noble Brewer, for instance, offers the first 500 approved members a share of 1.0% if within 3 months they successfully subscribe to a membership, post reviews of beers on the website, complete two feedback surveys and refer the network to five friends.
The creative class fights back?
As documented by journalist Scott Timberg in his book Culture Crash, writers, musicians, and other creative workers have been economically decimated in the last decade and a half, as tech giants like Spotify, Google, and plain old piracy gobbled up their traditional sources of revenue. But in recent months, a number of startups have appeared that seek to disintermediate creators and their fan bases. Bkstg allows musicians to create a CRM of their fans, instead of letting platforms like Twitter or Facebook monetize music fans’ data. Backfeed wants to enable journalists and others to create decentralized, blockchain-based publications. And now RocketClub gets app developers to gain users directly, without the mediation of ad tech platforms.
Do these startups constitute a backlash or trend? As Jaron Lanier has said, people don’t sit around like flu viruses, passively awaiting the plans of the master geeks to unfold. Instead, they play the game back, to the best of their ability.
Featured Image Credit: RocketClub