How a Basic Social App Just Got Acquired for $100M, 9 Weeks After Launching
Source: Kevin Natazon - Beta Labs
TBH, the app for teenagers to give each other anonymous compliments, has just been acquired by Facebook for about $100M - 9 weeks after launching.
Here's the most perplexing part of this whole thing - TBH is an incredibly basic app that most coders and app designers could build in just a few days. Even more perplexing - apps exactly like TBH have already been made so many times. Apps like Yik-Yak and Sarahah (both now out of business) essentially offered the same functionality but with many more features. Whitney Wolfe, the founder of Bumble, pivoted to building Bumble after the abandonment of her initial app project called Merci - an anonymous compliment-giving app for women. Essentially the same thing as TBH, but for young adult women instead of high school kids.
So why did TBH emerge as the golden unicorn in a market segment where everybody else failed?
A devastatingly effective market strategy. More specifically - understanding their audience and how to reach them. TBH hit 5 million downloads in 9 weeks without buying a single ad or doing a single interview. Facebook didn't buy TBH's app - they bought TBH's marketing talent.
"Understanding audiences" and "generating impressions" is a skill that every PR and Marketing firm on the market will tout to be the expert at. But at the end of the day, every agency on the market does the exact same thing as their neighbor - going off of what's tried and true rather than breaking new ground. Are you really an expert if you're just mimicking the tactics used by every other agency? Of course not. Real experts need to break new ground - it's what they do. Here's how the TBH team broke new ground:
TBH's target audience is teenagers in high school - here we have a territory that immediately seems off-putting to most. Founder Nikita Bier deployed a strategy the triggered virality among his target audience using a 3-part strategy:
1. Growth-Hacked Design
The app is designed in a way that makes it incredible hard for you not to share it. Before downloading, you need to grant the app access to your Address Book. Then, every profile is born with a unique link that users can copy to their Snapchat (which pretty much everyone did). Beyond that, every account needs to collect Gems in order to perform certain actions. How do you collect Gems? Gain followers. What's the fastest way to gain followers? Invite everybody in your Address Book. Which you can do with the click of a button.
However, beyond just the simple technical features that make sharing incredible easy, the design speaks the same language as Gen Z. Using terms like 'tbh' (to be honest), 'slide into the DMs' and creating polls for superlatives like 'most woke' and 'most lit' - the marketing team shows that they're acutely tuned into Gen Z cultural motifs. Teenagers using the app feel like it was built by one of them.
2. Organic Locality Targeting
They kicked off by shipping the app to 1 high school in Georgia. No other states were aloud to have it at the time. They focused on one market at a time. Before they could set their sights on the next state, kids from surrounding states were already demanding it and eager to access it. It's this type of limited release that arouses exclusivity and spikes demand. They only granted access to the app 1 state at a time, leaving kids online wondering when it would finally come to their state.
Most brands, apps, and startups go for an all-access immediate approach, thinking that allowing as many people to access it as soon as possible is key to growth. TBH's trajectory proves otherwise.
3. Content Crowdsourcing & Moderation
TBH's goal is to only create polls where the people being voted on would feel positive about being selected as the winner. As we all know, positivity is a feeling that releases dopamine and facilitates a better user experience than the previously popular gossip apps like Yik-Yak. TBH allows users to create and submit polls - meaning they let the users control the content rather than stepping in and insisting that they need to be in control of determining what content users would like to see. Thousands of poll suggestions are submitted by users and TBH's team simply filters through the submitted content and approves all positive content and rejects all the negative. The work of an entire content creation team can be done by 1 person now.
At the end of the day - Content Marketing, Growth Hacking, and Geo-Targeting win the game.
At a time when one of the biggest problems facing Facebook is an aging audience and slow adoption by Gen Z, it's a no brainer that they would pay $100M to acquire a team that demonstrated they hold the key to unlocking the Gen Z mystery and compelling them to action.