Sramana Mitra: You were recruiting college students. When a brand wanted to do market research, they’d come to your site and you would not only provide them with software to run their surveys but also provide the focus groups.
Tom Coburn: Yes. When Dharmesh invested, we were a couple of thousand dollars in revenue. We probably had 50,000 students around the country. It was all US-based at that time. They were logging into our website. Half of our marketing team was focused on students.
Then there obviously was a marketplace for the other half. The sales team was focused on selling to brands that might want to reach this audience and engage them. Our pitch to them was, “Try running the $10,000 that you would have put into Facebook Ads or Google Ads.” When Dharmesh invested, there were about 30 or 40 students working for the company. We built this whole network of students, mostly in Boston. That was how we were running the business.
Sramana Mitra: How did you charge?
Tom Coburn: Similar to Facebook or Google. They can put in $5,000 or whatever they want. We charge them a fee for every answer. We would charge them 50 cents. We would keep 25 cents for ourselves and the other 25 cents for the students.
Sramana Mitra: So students are maintaining accounts on your platform and answering questions to make some side cash.
Tom Coburn: Exactly.
Sramana Mitra: What was your strategy for acquiring students?
Tom Coburn: We tested a lot of different things. We had a referral program that was really popular. We created a campus rep program where we had students around the country who would tell their friends about Jebbit. It spread very quickly. We peaked at 200,000 around the country before we shut it down. The bigger problem for us was not around attracting students; it was on the brand side. It turns out that college students are very motivated. You could earn at a rate of $19 an hour. It was a simple sales pitch to get a lot of students to use it.
Sramana Mitra: The brands didn’t like that? This was not authentic enough feedback.
Tom Coburn: It wasn’t that brands didn’t like it. I ended up dropping out of school. Six months later, we raised a second round for a little under $2 million. I hired a team. We were about 8 or 10 people. We didn’t think this business was ever going to be a billion-dollar company.
One of the problems was around the authenticity of the interaction. The kids were incentivized to be there. Some of them would make genuine connections; a lot of them were just there for their beer money for the weekend. The other thing that we were experiencing was, it was pulling us in two directions.
The two main impetuses of the pivot were that we wanted to help facilitate more genuine interactions between brands and consumers, and we didn’t want it to all happen on our website. We wanted to equip brands with software so they could build genuine experiences to engage consumers. We wanted that to happen everywhere the brand already has customers. We wanted to remove ourselves from that part of the equation.
Sramana Mitra: The pivot is happening in 2014?
Tom Coburn: Yes.