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Klout acquired for $200 million by Lithium Technologies

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Re: Klout acquired for $200 million by Lithium Technologies

#21

Post by dpcheng2003 »

As a startup founder, let me take the contrarian view on this because I can see how it all went wrong. Klout, for the most part, had a very ambitious goal.

Given all our activity (direct or indirect) that is being captured on social networks and general internet activity, there was some inherent value (which we'll call a "clout score") in just knowing who was the "most popular" on these networks.

Now imagine you took in all the interest-graph related and search data, and refined that "clout score" to the niches and groups where that individual was most influential. In this hypothetical alternate universe, you can use clout scores and deduce, for example, that "so-and-so" was a more influential voice in the battery materials science community (i.e, cathodes) because her white papers were being shared more often on social networks and getting more backlinks.

But Klout didn't do that. Klout realized that to get to market quickly, they applied an arbitrary algorithm to social activity, which would encourage artificial activity on Klout to "game" the system. In another different alternate universe, this would be applauded as a successful growth hack and Klout would be filing their S-1 today. But in our universe, people saw the algorithm as hackneyed, particularly when Justin Bieber had a higher Klout score than the US president.

This go-to-market strategy was likely (I'm presuming) influenced by VC investor dollars and the perceived need to be always growing, driven by TechCrunch mentions and HackerNews front page posts. And to some extent, they were successful. They raised a lot of venture dollars, cashed out a few early employees (again, presuming) and convinced some really smart people to join and grow Klout.

But now that they've sold out, they can never do what they wanted to do. And in some ways, they've tainted that idea for others who may appreciate the "clout score." So selling out for $200M--for recurring revenue from large brands, patents associated with social activity scoring (didn't fact-check this but guessing) and great employees--is not a bad outcome for Klout or for Lithium.

But I'm sure once upon a time, Joe Fernandez (the founder), had a grander vision. This is hardly a bad consolation prize, but what if...

Re: Klout acquired for $200 million by Lithium Technologies

#22

Post by prawn »

pyrocat wrote: post #8
cpncrunch wrote: post #6

Earlier quoted context omitted.

LOL. Does anyone even use Klout any more? It always seemed a bit pointless.

social media obsessed marketers, so, not really.

My wife and a number of friends work in social media and marketing. Haven't heard anyone mention Klout other than in a joke for a long time.

Re: Klout acquired for $200 million by Lithium Technologies

#23

Post by zachinglis »

cpncrunch wrote: post #6
yid wrote: post #4

I, too, have a random number generator that I am willing to part with on very reasonable terms, cash/equity split negotiable.

LOL. Does anyone even use Klout any more? It always seemed a bit pointless.

Did anyone really use it in the beginning other to stroke their ego when they were feeling a bit down? :)

Re: Klout acquired for $200 million by Lithium Technologies

#24

Post by jusben1369 »

dpcheng2003 wrote: post #21

As a startup founder, let me take the contrarian view on this because I can see how it all went wrong. Klout, for the most part, had a very ambitious goal. Given all our activity (direct or indirect) that is being captured on social networks and general internet activity, there was some inherent value (which we'll call a "clout score") in just knowing who was the "most popular" on these networks. Now imagine you took…

I kind of agree. It really is a great idea that's super valuable. It was just too early or poorly executed. Someone will do it better in the future. For all the mocking developer folks here think of Klout as GitHub for marketers/influencers (if done correctly) It would allow you to get a view into how influential this person really was just as now days you can learn a lot about a developer by looking at GitHub. That can drive all sorts of hiring/contracting/engagement experiences per year. That's a big market.

Re: Klout acquired for $200 million by Lithium Technologies

#25

Post by ThomPete »

dpcheng2003 wrote: post #21

As a startup founder, let me take the contrarian view on this because I can see how it all went wrong. Klout, for the most part, had a very ambitious goal. Given all our activity (direct or indirect) that is being captured on social networks and general internet activity, there was some inherent value (which we'll call a "clout score") in just knowing who was the "most popular" on these networks. Now imagine you took…

I don't think anyone is contesting the grander vision.

The problem is that they sold out, way before they sold out. They slapped together something that might make it for a social media karme engine game kind of thing but not by any metrics any real valuable personification of influence. Besides what everyone else could already see, and even that they got wrong.

Re: Klout acquired for $200 million by Lithium Technologies

#27

Post by dpcheng2003 »

ThomPete wrote: post #25
dpcheng2003 wrote: post #21

As a startup founder, let me take the contrarian view on this because I can see how it all went wrong. Klout, for the most part, had a very ambitious goal. Given all our activity (direct or indirect) that is being captured on social networks and general internet activity, there was some inherent value (which we'll call a "clout score") in just knowing who was the "most popular" on these networks. Now imagine you took…

I don't think anyone is contesting the grander vision. The problem is that they sold out, way before they sold out. They slapped together something that might make it for a social media karme engine game kind of thing but not by any metrics any real valuable personification of influence. Besides what everyone else could already see, and even that they got wrong.

I agree. I guess my original comment was not more clear on this. The sell-out was the hackneyed algorithm, not the $200M.

Re: Klout acquired for $200 million by Lithium Technologies

#28

Post by mantrax3 »

dpcheng2003 wrote: post #21

As a startup founder, let me take the contrarian view on this because I can see how it all went wrong. Klout, for the most part, had a very ambitious goal. Given all our activity (direct or indirect) that is being captured on social networks and general internet activity, there was some inherent value (which we'll call a "clout score") in just knowing who was the "most popular" on these networks. Now imagine you took…

> "But in our universe, people saw the algorithm as hackneyed, particularly when Justin Bieber had a higher Klout score than the US president."

Maybe Klout was wrong with this particular arrangement, or maybe your assumptions about who has more influence are wrong. Ever thought about that?

After all, "entertainment clout" can be very quickly capitalized as "political clout", as Mr. Terminator has demonstrated.

When it comes to selling products, whose endorsement will sell more products: Justin Bieber or the US President?

Remember Klout's score is used to give "perks" to influencers, the purpose of which is that they show those perks to their fans, therefore influencing them.

While I don't care about Klout at all, I have to say I'd rather bet on Justin Bieber than the US President for that specific purpose.

Re: Klout acquired for $200 million by Lithium Technologies

#30

Post by dpcheng2003 »

mantrax3 wrote: post #28
dpcheng2003 wrote: post #21

As a startup founder, let me take the contrarian view on this because I can see how it all went wrong. Klout, for the most part, had a very ambitious goal. Given all our activity (direct or indirect) that is being captured on social networks and general internet activity, there was some inherent value (which we'll call a "clout score") in just knowing who was the "most popular" on these networks. Now imagine you took…

> "But in our universe, people saw the algorithm as hackneyed, particularly when Justin Bieber had a higher Klout score than the US president." Maybe Klout was wrong with this particular arrangement, or maybe your assumptions about who has more influence are wrong. Ever thought about that? After all, "entertainment clout" can be very quickly capitalized as "political clout", as Mr. Terminator has demonstrated. When i…

I respectfully disagree with your argument because that's not the one I'm making.

I think the general consensus from Klout detractors is that a single "score" cannot encompass someone's influence. Some people are more influential in certain circles than others.

Of course, there is a broad-based influence score you can apply to people, in the same manner that Super Bowl ads are expensive because they reach a broad-based group of US TV viewers. If Justin Bieber reaches that group better than President Obama, than his higher Klout score is accurate.

But under that assumption, his Klout score (and many other Klout scores) are meaningless because we don't think of ourselves in that context. This is why, for example, HackerNews karma points are not fungible to Reddit's /r/AdviceAnimals karma points.

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