Venture

Why SocialRank Sold Its Profitable Business To Start From Scratch

Before it was a pain point, the “Wild West of data and social media tools” was the perfect breeding grounds for a startup, according to Alexander Taub.

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Taub co-founded SocialRank with Michael Schonfeld in 2014 to help Twitter users better understand their followers, in a time frill with the rise of social media giants and analytics platform proliferation. The ‘Google for audience analytics’ became profitable three years later.

Today, New York City-based SocialRank’s assets and IP was scooped up by Toronto-based Trufan for an undisclosed sum. Under Trufan, a fan and micro-influencer engagement company, SocialRank will continue as a standalone product, except the five-person team behind it has moved on to a new venture.

Before we get into what that new venture is all about, let me first tell you the story of how SocialRank went from thriving in the ‘Wild West’ to turning its eye outward to acquisition or potential shut down. Between when it was founded in 2014 to today, the startup tells us a story about social media giants, venture capital money, and, in my opinion, a healthy dose of ego.

Some Background

In 2014, SocialRank was founded to give social media users better insights on their followers. It can analyze the audience of, say, the President of the United States (it actually did that).

In its life as a private company, SocialRank raised $2.1 million, from various individuals and Rainfall Ventures. It became profitable by 2017 with customers like the NBA, Nike, and Netflix using the platform to better target advertising to social media followers.

But then Cambridge Analytica, coupled with the crackdown of social media platforms on third party apps, happened.

And Then

As the Wild West became a bit more tame, Co-founder Taub found SocialRank a bit constrained, as the startup relied on access to data and a certain level of flexibility from social media giants so it could run its analytics.

“If you’re built on top of APIs and third party data, you can only be as big as [social media platforms] want you to be,” he said. “Twitter, Facebook, whatever? They sort of held the keys.”

He added: “SocialRank would never be a billion dollar business. It could be a multimillion dollar business, but not a billion dollar business. But when you need to build on other people, it could potentially hinder your growth.”

Eventually, that profitable, but not explosive, growth led SocialRank to look for a buyer. As mentioned earlier, it was sold to Trufan today.

Yet the decision to sell was a two-years-in-the-making decision. After it became profitable, SocialRank went on “autopilot” mode to figure out what to do next, whether it was to sell or shut down. It ended up using that autopilot time (and the revenue stream and VC money that followed) to work on developing a new venture: Upstream. Following today’s acquisition, the entire SocialRank team will move to working on Upstream.

Unbundling The Pivot

Taub describes Upstream as a social media platform focused on the unbundling of LinkedIn. He pointed to the unbundling of Craigslist to show some market promise.

“Local became Nextdoor, and short term rentals became Airbnb and classified became Tinder and forums became Reddit. And like, basically, people went really, really deep on these pieces of Craigslist, and they built like multibillion dollar businesses,” said Taub.

Taub said he thinks Upstream will similarly take apart LinkedIn’s group feature, which houses together for an alumni group or a startup scene in a specific region, to bring communities together.

While the app only has around 600 users right now and is still in the beta and planning phase, Taub imagines Upstream to be “what a professional network would look like today if it started on your phone.” It will focus on networking and career advice, and he emphasized this, “it will not be a LinkedIn 2.0.” So put away your digital resumes.

“We believe that we’re building a company not just for the next year or two to pump it and try to sell to LinkedIn,” Taub said. “I want to work on this for the rest of my life, this should be my life’s work.”

Illustration: Li-Anne Dias

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