Mashable perhaps says it best: “So many statuses, so little time.” Social media can be an excellent tool for small businesses to collaborate and to build and maintain relationships with new and returning customers, but managing multiple profiles, commentary, and brand mentions – and keeping social media assets secure – can be a daunting task. HootSuite, which builds and markets a social media dashboard for Web and mobile platforms, aims to help individuals and organizations manage multiple social profiles including Twitter, Facebook, and LinkedIn, among others. Users can also monitor brand mentions, schedule updates, and track results with modular reports that integrate with Google Analytics and Facebook Insights. The product includes security features to prevent account hijacking and mistakes when posting to corporate profiles.
HootSuite CEO Ryan Holmes launched successful entrepreneurial endeavors in a variety of industries, from founding a pizza restaurant chain to building the top online paintball equipment supplier in Canada, before founding Invoke Media, the agency that created HootSuite. By using social media channels and reaching out directly to influential Twitter users and agencies that had a similar need, HootSuite reached 200,000 accounts within one year. This was accomplished largely by using the functionality of the dashboard to promote the dashboard itself. HootSuite was then able to spin off from Invoke. It was initially bootstrapped from Invoke, and in December 2009, raised a $1.95 million Series A from Blumberg Capital, Hearst Interactive Media, Geoff Entress, and Social Concepts.
Holmes says that HootSuite was born out of a need Invoke had to solve the problem of managing multiple Twitter accounts and profiles for its clients. The team recognized that others faced similar challenges and set out to build the tool themselves.
For a top-down perspective on market size, in 2010, there were more social media accounts than e-mail accounts – clearly a major paradigm shift. According to HootSuite, there are more than 10 million e-mail marketing platforms. From the bottom up, again in the context of the e-mail industry, Datran says that in 2008, “more than 80 percent of marketers sent targeted e-mail campaigns.” Further, the Social Media Examiner 2011 Marketing Report showed that 81% of marketers use e-mail campaigns, indicating that a mix of delivery tools are being used, many by SMEs. These SMEs are all potential HootSuite customers, since such people need a tool to manage social media campaigns for their users. Says Holmes, “When you add in the additional viral effectiveness of social and social graph, it stands to reason that social will become a much larger part of the marketing mix.”
HootSuite’s top target segments are SMEs, ad/PR agencies, governments and nongovernmental organizations (NGOs), and individual power users with advanced needs. Customers include The White House, Martha Stewart Omnimedia, Zappos, Mashable, SXSW, CNN, the U.S. Department of State, U.S. FEMA, the Canadian Prime Minister’s Office, Oprah Winfrey’s O, The Oprah Magazine, Facebook, UK Foreign Service, the U.S. Army/Navy/Air Force, Harrah’s Hotels and Casinos, Marca (a Spanish newspaper), Youmiuri (a Japanese newspaper), the Washington Post, the Los Angeles Times, Slate, Oxfam, and UNICEF.
The dashboard comes with a toolkit of social media tools for organizations to broadcast, monitor, collaborate, and report on social campaigns and initiatives. This eliminates the need to jump between (and pay for) multiple applications. The product comes in a mobile version for iPhone, iPad, Android, BlackBerry, and Keitai. Prices range from free for the Basic version to $5.99 to $1,250 for the Pro version; $1,500 and up for the Enterprise version, $27 a month for the learning certification program, and $50 to $500 a month for the Owly Pro URL services.
In August 2010, HootSuite announced its Freemium model, in which 95% of its user base could remain free, and those with advanced business needs could opt in to paid Pro or Enterprise plans. Within five months, HootSuite was cashflow positive and had reached over a $1 million in revenue. The company says that there are 1.65 million registered users, 1.3 social updates sent per day, and more than 3 million social networks managed, approximately 4% of which are on the Pro plan. The user base from Q1 2011 is growing at a rate of 8% month over month, and revenue from Q1 2011 is growing at a rate of 42.58% month over month. The top countries represented are the U.S., Japan, Canada, the UK, Brazil, France, the Netherlands, Australia, Indonesia, Spain, and Germany.
When HootSuite launched, a few other third-party Twitter apps were entering the market. Some, like TweetDeck or Seesmic, were designed for consumer/power users, while others, including Radian6 and CoTweet, focused on enterprise customers. A third category focused on niche markets – UberSocial (formerly UberTwitter) is one example of this. Christopher Hosford of B2B magazine summarizes the features of the many other niche players. HootSuite says that while many other tools concentrate solely on personal social media use, it aims to differentiate itself through a model that allows users to select the plan that’s right for their needs, from Basic to Enterprise. With consolidation in the industry, HootSuite believes it is well positioned with diverse product offerings and a range of network partners.
Holmes says that his team has been “sprinting to outperform the market. To give you an example of the drive our team has inherently, for the first six months, our director of marketing worked 60-hour weeks with a painful abdominal hernia. No one knew until a week before the operation, but this type of stoic, buckle-down grit is a testament to the excitement and dedication the HootSuite team brings to the table.”
Major initiatives for growth include:
As of now, HootSuite is focusing on these initiatives and has no plans for an exit.
The 1M/1M Deal Radar: WebiMax, Mt. Laurel, New Jersey
Social Media Governance (a blog by Chris Boudreaux)
This segment is a part in the series : 1Mby1M Deal Radar 2011