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‘Authentic’ social media apps like BeReal and Poparazzi see serious growth—but have one big drawback

August 3, 2022, 8:26 PM UTC
A young woman takes a picture with her phone on the beach.
Apps such as BeReal have taken off in recent months among Gen Z audience. They promise to foster “authentic” digital connection without the drawbacks that caused backlash against Instagram and FaceBook.
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Can social media get real? A new generation of social media companies that aim to provide “authentic” digital connections between users are betting on it. “When [Instagram and Facebook] first came on the scene, they were touted as a way to connect,” explained professor Arun Lakshmanan at the University at Buffalo School of Management. “Then, over time, use actually correlated with greater loneliness and disengagement as the business model behind that has fueled a different sort of behavior,” he added. “[These apps] are a market response to a failed need, which is the need for an authentic connection.”

BeReal, a French startup founded by former GoPro employee Alexis Barreyat in 2020, has taken off among college-age kids in recent months. The app aims to bring casual, low-stakes photo sharing back by sending users a notification at a random time each day to take a picture of what they are doing at that moment. Users then have a two-minute window to capture an image that uses both the front and back phone camera. BeReal garnered 7.67 million downloads so far in 2022 after the app implemented its ambassador program to promote the app on college campuses. In the week of July 11 alone, the app was downloaded 1.7 million times in its largest weekly growth ever. According to research from Sensor Tower shared with Fast Company, despite the fact that the firm is headquartered in Paris, the United States is the app’s biggest market; 35% of its downloads are U.S.-based; 17% of downloads are in the U.K.; and 10% are in France.

Insider reported that BeReal’s current fundraising round, which is led by GST Global, will value the company at about $600 million. BeReal also raised $30 million in its Series A fundraising round that was led by investor Andreesen Horowitz. 

Supporters of the app argue that it successfully takes away the pressure to have a following and a curated profile. “[The app] is so popular with Gen Z because they are so aware of the unattainable direction all the other apps like Instagram have gone in,” explained Rebecca Finn, research and insights director at We Are Social.

What it’s like to use BeReal

I was introduced to BeReal by my friend from college in April. The app feels lighthearted and easygoing, which is a change of pace from how much of our time on the internet is spent. Using the app feels like the earliest days of Instagram when the bar for what was considered post-worthy was low and users just posted random moments from their day. I like that BeReal helps me stay connected with friends from college whom I don’t talk to daily anymore. Yet I also know people who still feel social pressure from posting every day and would rather call or text friends to stay in touch—which, obviously, even an “authentic” app is not a stand-in for. Part of the app’s draw is that it is meant to capture the mundane everyday—but that can also make it boring. Most of my feed on weekdays is my friends working on laptops or walking dogs around their neighborhood. While the concept is fun when it’s novel, you can see how users would potentially lose interest over time. The app’s huge influx of users has also triggered persistent glitches.

Poparazzi is another photo-sharing app that also brands itself as a platform for fun, easy connection with friends without the pitfalls of “social media 1.0” (Instagram, Facebook, etc.), explained CEO and cofounder Alex Ma. Users of the app have a profile, but it is made up of pictures friends have taken of them, as opposed to pictures they post themselves. Ma explained that he and his brother Austen came up with the idea for Poparazzi after building about 10 different apps that all were meant to be platforms to connect users in a more genuine way. Their first app, called TTY, was a platform for sharing voice clips. When they thought of the concept for Poparazzi, it felt like the most original platform structure to achieve their goals. “I think there’s a lot of apps out there that are trying to create more authenticity, but we actually felt like the root cause of inauthenticity was actually posting yourself,” Ma explained.

Poparazzi, which is headquartered in Marina Del Ray, Calif., has hit over 5 million downloads a year after its launch and raised $15 million in its Series A fundraising round led by Benchmark. According to the app’s data, 95% of its users are between the ages of 14 and 21.

How will BeReal and Poparazzi make money?

Yet as apps like BeReal and Poparazzi grow their Gen Z user base with an appealing offer of ad-free, low-maintenance interaction, questions about how they will actually make money remain. The mission behind their platforms is antithetical to traditional social media marketing tactics. While these apps have venture capital backing, their path to going public is rocky if they won’t adopt a business model that could compromise their “authentic” branding.

According to Ma, Poparazzi has a runway of about two years before the app plans to start generating revenue. “I think where a lot of products go south is when they start to inject ads into the production experience,” Ma explained. “This is something that social media 1.0 got wrong,” he added. When the marketing value is based on ads, then the focus becomes gathering data to create more personalized ads, as opposed to the mission of connecting with friends.

As the tech market plummets and the industry remains volatile, the firms could start being pressured to make a plan for generating revenue sooner than expected. “I think for companies that have no revenue at all, it’s urgent that they come up with some kind of a way to generate revenue,” said Peter Cohan, a professor of business strategy at Babson College. 

Ma said that he does not feel pressure from investors to create revenue anytime soon and that the team’s energy is currently focusing on building an Android version and improving the app’s functionality. He explained that his vision for monetizing would be to garner revenue from the brand itself. “I do see a future for Poparazzi where we can monetize our brand and not the product,” explained Ma. He noted that selling merchandise and running events under the Poparazzi brand could be potential revenue streams, as well as monetizing in-app purchases.

Cohan expressed doubt that strategies such as selling merchandise would bring in the amount of revenue startups generally need to achieve financial milestones. “It is unclear what the business model is going to be for these sites,” Cohan said. “To go public a startup needs to have at least $100 million in revenue, and be growing at 30% to 40% a year in revenue, if not over 100% a year in revenue,” he noted. “If they’re thinking that they’re going to be able to sell T-shirts and generate that kind of revenue, I am skeptical.” 

While Ma has not completely ruled out in-app advertising, he is aware of the fickle nature of a young audience. Gen Z has left a trail of briefly popular social media platforms that quickly lost their buzz, such as Dispo and Clubhouse. According to We Are Social CEO Benjamin Arnold, traditional advertising on these apps would drive away a Gen Z audience “almost instantaneously.” “Especially within that kind of prize young audience that everyone’s talking about—the early adopters that are on [these apps], you know that those are the ones that are the most averse to advertising,” he said. Finn agreed. “If you have an ad mid-scroll, it will just kind of immediately defeat the purpose of the app and why it’s so popular,” she said.

Privacy vs. economy on social media

Lakshmanan noted that a tiered subscription model has worked in other industries and could be a way to monetize without traditional brand advertising. He says that users of all ages understand the implicit bargaining they are making when interacting on platforms that have ads. While Cohan seemed doubtful young users would pay up, Lakshmanan thinks that people are in many ways more comfortable paying for content than they used to be when everything online was assumed to be free. “Especially once the trade-off between privacy and economy becomes more favorable in favor of privacy, then people might be willing to pay for it,” he explained.

As BeReal skyrockets in popularity, some brands have already started to use marketing tactics on the app. Chipotle created an account for its brand and posted a reusable promo code giving the first 100 people who used the code a free meal. The Chipotle marketing team aims to feature “behind the scenes” content from employees to attempt to maintain the authenticity mission of the platform. Other brands like the clothing store PacSun and Trident Gum have made BeReal accounts.

As we’ve seen time and time again, as soon as a novice platform starts to grow, the established players catch wind and implement some version of the technology in their own apps. Instagram copied Reels from TikTok and now has implemented Dual, a feature that allows users to post a temporary post using the front and back camera. Yet the allure of BeReal isn’t the front and back camera, but the larger ethos, which Instagram by nature can’t re-create. While Instagram has not designed a feature to mimic Poparazzi, Ma isn’t worried about the idea being re-created by a bigger existing platform. “You can copy product mechanics all day long, but you can’t copy a core philosophy for building,” Ma said.

Will these apps have staying power? According to Lakshmanan, there are a few factors that predict whether an app will stick around past initial novelty interest: how easy it is to navigate the interface, how habitual it is for users, and how strong of a network users have on the app. Investors believe these apps have what it takes—not just to stay relevant long enough to grow but to make money. Ma said he’s playing the long game. He brought up, for example, how the app Musical.ly eventually became TikTok. “Our company is very mission focused, and we build on a very long-term horizon,” he said.

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