[Steemhunt] How to startup

Hi, @jayplayco here.

It has been a few days when I saw an article from one of the founders of @steemhunt.

The article is reviewing the main concept of PoB and getting in details about different business models and timing of profit for a startup. And yes, I agree that there are different kind of business models and there could be even models that have not been discovered. There are different kind of ways and timings to create profit and there is actually no right way how to startup.[1]

1. Type of profits based on the 10 biggest companies (market cap)

Company	Market Cap	Profit Type	Headquarter	Founded
Apple	1000	Product sales	USA	1976
Amazon	860	Marketplace	USA	1994
Microsoft	833	Product sales	USA	1975
Alphabet	765	Service	USA	1998 (Google)
Berkshire Hathaway	517	Finance	USA	1839
Tencent	496	Service	China	1998
Facebook	444	Service	USA	2004
Alibaba	370	Marketplace	China	1999
JPMorgan	362	Finance	USA	2000
Bank of America	282	Finance	USA	1998

Source [4] (Data is from October 2018, which differs in the total market cap of December 2018)

As we can see Alphabet (Google) and Facebook are companies that are represented in the top ten with a service orientated business concept. This means that they are utilizing their userbase to make it attractive for businesses and getting their profit from b2b and not b2c. Tencent is well known for his dominant messenger QQ in China and got their first profit from charging their user for their messaging service. More importantly is the messaging app Wechat, which is similar to Whatsapp the main communication tool in China and includes PG (payment gateways) services, etc.

It is, of course, difficult for such top ten companies to funnel their incoming profit to a single source, as many of them have already diversified their portfolio, but it is good to get an idea.

2. The journey of Steemhunt

Steemhunt started with the mission to take the core part from Producthunt and create a better version out of it. Producthunt launched end of 2015 with a Y-combinator background and got directly funded before they officially launched the product a year before in 2014 with 7.5 million USD.[5] Angelist acquired Producthunt for 20 million USD end of 2016. Their first profit was generated at the end of 2017 with a SAAS product called "SHIP", which is a suite of tools creating demands for the products from brands and makers. [2] Long story short, it took Producthunt more than 2 years with 7.5 million USD in cash in their pocket, before hitting the first meaningful milestone for profit.

a. Bootstrapping the first product

Source

One of the great part Steemhunt is always doing is, that they move fast and deliver first. In March 2018 they announced the launch of Steemhunt. After the initial start, the team needed again to pivot their marketing plans, as the initial attention of the community was not as big as hoped. That was the first time that a company started a 50% airdrop and utilize the airdrop directly to build up a community.

There are concerns that the huge amount of airdrop is diluting the value of HUNT tokens, but if you go further into detail, the whole airdrop is not designed just to increase the holders of the tokens but to change the bigger part of token holders into active Steemhunt users. In the end, the Steemhunt team is creating their own marketing budget to create the most valuable part of Steemhunt, the community.

b. The community as strategy

Source: Jens Johnsson
As a bootstrapping company, it is important to keep the cost as low as possible to increase the chance to hit BP (Break-even point). But at a certain point, you need support to keep your service running. Steemhunt decided from the early beginning to run Steemhunt as a community-based service. This means that the daily service is running with volunteers from the community. This includes influencers, moderators or community manager who are doing tasks on a daily basis and getting rewarded. With this concept, the Steemhunt team can concentrate on developing the platform and system but always gets the VOC (Voice of the customer) directly from the community.

c. Pivoting speed as strength

Source: Amy Humphries

Since the beginning, the Steemhunt team proved again and again with their product that they are able to adapt to reality. With POB (Proof of Brain) as the base layer, a ranking board was not working, so new algorithm like ABV 1.0, 2.0, user score, etc. had been added in the last six month. We are in the moment at a dynamic user store combined with staked Hunt tokens and an ABV based user score. This score requires the hunter to stake his Hunt tokens and be an active member of the community to be able to get a higher reward. Many factors of direct impact have been eliminated and most factors are now indirectly influencing the score so that Steemhunt community members have a reason to stay constantly active within the community.

3. The next steps

We are in a bearish market and we have seen now Steem prices at a very low level. But good services do find their way out of difficult situations and I think that the team and the community behind Steemhunt are already showing that they are able to adapt and that they will make a working token economy with planned platforms like Reviewhunt and Ideahunt.

The hunt is on!

[1] http://ryanhoover.me/post/79296806668/theres-no-right-way-to-start-up
[2] https://blog.producthunt.com/how-we-made-our-first-dollar-at-product-hunt-40493fe09a7a
[3] https://www.crunchbase.com/organization/product-hunt#section-acquisition-details
[4] https://www.investopedia.com/articles/active-trading/111115/why-all-worlds-top-10-companies-are-american.asp
[5] https://www.crunchbase.com/organization/product-hunt#section-funding-rounds