For any startup, pivoting is one of the hardest things you can do.
For Venice-based Palaround, however, a pivot not only opened up business opportunities, but it also allowed the startup to scale the company in a way that would allow them to be profitable while building a community of users.
The app, which started as one of many friend finding apps, hasn’t gone too far from its platonic matchmaking roots. In fact, Palaround still matches people together, but in a different way. Instead of connecting friends based on location and common interests, Palaround focuses on creating private social networks that integrate their swiping functionality to stimulate conversation amongst alumni groups, conference attendees or a company's employees.
“When we started in the friending space, we ran into the problems that are very typical for social networks: density and distribution," said CEO and co-founder Joel Kliksberg. "It turns out, while friends tell other people they’re on a dating app, they don’t typically tell others they’re on a friending app, or at least not yet.”
For Palaround, the decision to pivot toward enterprise came while attending the Y Combinator Fellowship. After being approached by several companies looking to build private social networks for their employees, the change they needed to make was obvious. The startup used the rest of the fellowship as an opportunity to grow out its new model.
The networks Palaround creates have the company’s friending element top of mind. Whether it be an alumni organization or private club, networks are designed to be easy to set-up and simple to use. Some networks even feature group chat functions with icebreakers to stimulate conversation as a novel way for organizations to unify their members ahead of a big event.
“We basically shifted our focus from the consumer to businesses,” said Chief Operating Officer Esther M. Santos. “The customer signs up, they pay a network signup fee, and then they pay a monthly subscription fee to maintain the networks. Different networks have certain capabilities, like chat or push notifications.”
Aside from demand, the pivot offered the startup an opportunity to scale the app in a way that would allow the company to grow, leading to a more friendly user experience for the community.
“Even though we say we pivoted, the original idea is still there,” said Santos. “The reason for the pivot was so that we could scale the business much more quickly. If we are signing up users by the thousand, that’s going to make the general Palaround network that much better of an experience for individual users.”
Though the funding raised by the company is “in the six figures,” Palaround has been profitable since the beginning.
“Even though we’re a social network, we’ve made revenue since day one,” said Kliksberg. “Right now we just started the process of raising an additional round.”
For Kliksberg, a journalist-turned-lawyer-turned-entrepreneur, the company's pivot doesn't represent a change in his original vision.
“There’s no really great service for platonic friend discovery; networking is broken,” said Kliksberg. “The crux of the idea is still very much there, I just think we have added a more professional approach to it.”
Image Courtesy of Facebook
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