One of the hardest things start-ups face is getting that initial marketing boost or user-base that often ultimately determines their success or failure. Now, a unique and innovative start-up Wahooly attempts to solve this.
Wahooly allows would-be investors to use their social influence to gain a small equity share in start-ups at no cost. Start-ups bargain-off 4-5% equity that is shared among 5,000-10,000 users who have a vested interest in seeing the start-up succeed. Think of it as artificial brand advocacy for start-ups when they need it most.
We caught up with Wahooly founder Dana Severson who gave us a better idea of how the product works. While the media landscape may have changed significantly over the past number of years, the basic principles of marketing have not. Word of mouth and third-party endorsements are still the most important forms of marketing. People use social media to endorse their own favoured brands more and more as the tools to do so are ever increasing. Wahooly wants to reward these brand advocates and allow them to see the value of their efforts.
Beginning in January 2012, Wahooly will move into private beta with 25,000 initial users. These initial users will be introduced to 200 start-ups that they can personally evaluate and choose individually whether or not they want to be a part of. After all, endorsing something that you actually believe in and appreciate infinitely lightens the workload. Wahooly in beta form will be a complete working system with personal users dashboards and influence tracking.
When users do sign-up to a particular start-up, Wahooly actively tracks their promotion of such and displays these results in a personal dashboard. Wahooly’s algorithm determines a brand advocates reach and influence, which in turn determines the user’s share of the equity. Increased marketing activity towards a brand will increase one’s equity share in that start-up, while little to no activity will diminish it. Those with the most influence or reach are rewarded with the most shares. It is with this premise that Wahooly can be described as Klout meets Kickstarter.
Users are kept up-to-date with their own start-ups’ activities through Wahooly, so they’ll always have something new to share. Three scenarios exist that will see users turn their equity stake into cash; if the start-up chooses to buy back the shares, is sold or goes public.
Now all you have to do is become one of those initial 25,000 Wahooly users and hope your start-up becomes the next Facebook or gets bought-out by Google!