This is one of the AdTech Startup Ideas from the 1001 Startup Ideas collection of YoStartups. This AdTech Startup Idea is about creating a decentralized content & social media platform. The social media platforms have become an integral part of our life as it gives us the sense of belonging to a group and fulfill our socializing needs. Unfortunately, most of these social channels are suspected to be spies and there is growing distrust. The proposed startup idea intends to rebuild that trust by creating a decentralized content & social media platform which gives you complete control over your private data.
Market Definition for Decentralized Content & Social Media Platform
Social Media user growth is outpacing both internet and mobile adoption rates. According to Global Digital Report 2018, the number of social media users worldwide in 2018 is 3.2 billion which is 13% higher than the previous year. While the internet users and mobile phone users are 4 billion and 5.1 billion respectively, which are only 7% and 4% higher than the previous year respectively.
As of April 2018, Facebook is the leading social networking platform with 2.2 billion users, followed by Youtube and Whatsapp, both with 1.5 billion users. Some of the other popular social networking platforms are WeChat (980 million users), Instagram (813 million users), and Twitter (330 million users).
During last 5-7 years, the social media platforms have also become a popular channel among businesses to advertise their brands and products. The main reason being the ability to target to a specific set of users based on their social profile which in return gives higher ROI on marketing campaigns. The social network advertising global revenue has grown to more than double from $18 billion in 2014 to over $40 billion in 2017.
Competitor Analysis for Decentralized Content & Social Media Platform
While there is an abundance of traditional social media platforms like Facebook, Instagram; there are few decentralized social media networks that have come up over last few years. The concept is still catching up the trend and mass awareness.
One such decentralized platform is Sola, which defines itself as “next-gen decentralized social network”. Instead of creating money for the platform through advertisements, the platform allows its users to earn money by using the platform. It also doesn’t follow the concept of liking or following a page or profile but has its own AI enabled algorithm for suggesting the right content for its users.
Another company on a similar concept is New York-based Steemit. It is a social media platform built on a decentralized databased so that users own their data and can be rewarded for posting and screening contents.
Pain Point & Target Audience for Decentralized Content & Social Media Platform
The target audience for the proposed startup would be any social media user and businesses who are looking social media as an advertising option.
There have been recent events where social media platforms have openly flouted the data privacy laws and have shared the private user data with agencies without user’s approval or knowledge. This is quite serious as these social platforms have access to complete social and personal information about the users. One such recent case was of Facebook, where they supposedly shared the private information of 50 million users with a data analytics firm Cambridge Analytica. It led to the worldwide awareness of this data privacy issue and led to the #deletefacebook movement.
In respect to the businesses, they pay a hefty advertisement and marketing fee to these platforms to reach to their target audience. Even after making the payment, they do not have complete control over the campaign reach and effectiveness.
Value Proposition for this AdTech Startup Idea
The social media has evolved a lot over last few years; from just being a high-school students’ playground, it has evolved to be an important part of our social life. The proposed startup will bring the fair digital ground for both users and businesses.
The users will have complete control over their data privacy with no third party spying on their private data. They can also be rewarded for being part and growing the network by creating and/or screening the contents. There will be no bombardment of irrelevant advertisements and promotion on user’s feed, and the users will be able to choose what kind of promotions or advertisements they are interested in, and will also get paid for sharing their information with those businesses.
For businesses, they have more control over their advertisement campaigns as they only target the users who have opt-in for it; this helps in creating better ROI on the campaigns. Plus, with no involvement of any third party, the businesses will not have to pay hefty advertisement fee to access the users and can choose to better incentivize the users with the budget.
Business Model for Decentralized Content & Social Media Platform
The proposed startup need to establish the social media network on a blockchain platform which is built on top of a new kind of digital currency. The platform will incentivize users by paying them in the cryptocurrency for content creation and screening of the available content on the platform.
The businesses will also award the users with the cryptocurrency for showing interest in their advertisement campaigns and sharing their social information. In return, the users will be able to redeem the cryptocurrencies at these retailers for the actual purchase.
The startup will make money in the long run over the valuation of the introduced cryptocurrency which will gain its value based on the increased transaction volume.
Way to market for Decentralized Content & Social Media Platform
The first step for the proposed startup is to understand and clear all the legalities regarding setting up a digital currency and decentralized network in the country of launch.
The startup would then need to work on formulating the smart contract logic which can generate cryptocurrency tokens. Once a smart contract logic has been commissioned, there needs to be a validating procedure in place which verifies the integrity of any transaction on the network. There is a need to set up some kind of digital signature procedure that can be done by a large number of participants (or verifiers).
Then the startup should partner with other crypto exchanges and banks to facilitate the conversion to the fiat currencies. This partnership will be critical to take the concept of decentralized social media network to the mass market. And once these basic setups are done, the startup is good to launch after completing its architecture and UI/UX.
Milestones for Decentralized Content & Social Media Platform
The proposed startup should look to launch the decentralized platform within 6 months of the inception. Once launched the startup should target to reach over 2 million unique users in the next 6-8 months. Once the platform gets more over half a million users, it can also look for the option of ICO to raise funds.
Investment Needed For Prototype for Decentralized Content & Social Media Platform
The startup should look to raise upto 100k for the product development and initial marketing. Once the platform is set-up and functional there is literally no cost associated to keep it operational, so the money is only needed for one-time platform set-up.
The startup should try to get into one of the blockchain specific accelerators which will not only provide the access to seed fund, but also the blockchain expertise and legal advice.
Investors / Expert Take for Decentralized Content & Social Media Platform
There is greater than ever need for social media platforms to pivot to blockchain based decentralized network due to the mounting urgency for privacy and data security. The traditional social media model of harvesting user data for targeted marketing campaigns in exchange for free usage service does seem to be outdated and companies would need to innovate their business model.
Also, the traditional social media channels like Facebook and Twitter are banning any crypto related marketing campaigns, which has further accelerated the efforts of blockchain enthusiasts to create a parallel social media network and break the digital monopoly.
According to Bloomberg Technology, recently the Russia-based social media company managed to fundraise over $1.7 billion in token sales between February and March of this year. The company plans to use the proceeds to develop what it calls the “Telegram Open Network” (TON) powered by its cryptocurrency known as “GRAM.”
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