Founded on May 8, 2011, Kumbuya is a multi-dimensional social commerce website that unlocks the monetary potential of anyone’s network. Key influencers create communities with different themes. The themes, called “Tribes,” allow members to engage and collaborate in a variety of ways by sharing content, photos, videos, and transacting business. Community leaders and bloggers earn revenue from commercial transactions executed by members within their tribe. Social commerce finds users at the right place, at the right time, with goods they’re interested in, endorsed by someone they respect.
PRODUCT/SERVICE: Users have the freedom to create and/or join tribes of their choice with approval from the leader. Tribes can be based on an infinite variety of themes or interests. They bring together like-minded individuals who network by sharing text, social media tools, and buying and selling goods and services. Members must receive approval from the tribal leader to transact business. Tribal leaders can imbed their tribe onto any proprietary website.
VALUE PROPOSITION: Kubuya offers the following value propositions: tribal leaders decide which transactions to allow in their community; tribal leaders earn revenue from every completed transaction which they influence; businesses can pinpoint the best prospective customers in the tribes; businesses can build relationships with the tribal leaders to drive long-term revenue and loyalty; businesses can invite their customers and friends to interact with each other in a fun environment and facilitate support for their product; companies can imbed their tribe on their corporate site and attract customers; social commerce offers a larger growth opportunity than traditional display advertising.
MARKET SIZE: Kumbuya has unlimited potential with millions of prospective users who are currently drawn to popular social networks such as Facebook, LinkedIn, Twitter, Pinterest, etc. Anyone can create a tribe based on any theme or common interest and potentially attract a large crowd of loyal members.
REVENUE MODEL: Kumbuya has multiple sources of revenue: 1. Offers–Businesses can offer coupons or daily deals which become valid when a minimum number of members in a tribe agree to participate. 2. Wants–Members who want a specific product or service can ask companies for a group discount. 3. Display Ads–Companies and business professionals can advertise their products and services. 4. Sponsored Content–Companies can sponsor or create content and display their logo. 5. Music–Bands can stream audio/video and charge 99c per registered member. 6. Monthly Subscription Fees–Companies can erect a pay wall and charge members to read proprietary content. 7. Ticket Sales–Tribal leaders can collect a percentage of gross sales from events. All revenue is split 50/50 between Kumbuya and tribe owners.
MANAGEMENT TEAM: Founder/CEO Joshua Karp is a serial entrepreneur. He’s the former founder/publisher of The Printed Blog which was the world’s only print magazine comprised entirely of blogs and other online content. The publication received world-wide attention from dozens of TV and radio appearances, hundreds of newspaper articles, and more than 100,000 blog posts. In 2002, Joshua founded Freerain Systems which offered consulting services and proprietary procurement software to the public sector. The company was acquired in 2007 by eSchoolMall, their number #1 competitor. COO Adam Johnson co-founded Neokast in 2008 which raised $3 million and received a $10 million buyout offer from Microsoft. In 2012, he helped Shiftgig, a Chicago-based start-up, acquire 80,000 users within 8 months. Co-founder/Chairman David Greene is an original investor in Kumbuya but not involved directly with day-to-day operations. Samantha Harris is a marketing specialist and in charge of customer service. Alla Elfimova is a senior data analyst.
COMPETITIVE ADVANTAGE: Kumbuya has the following competitive advantages: 1. Unlike current social networks, community leaders and bloggers control and earn revenue from commercial transactions executed by members within their tribe. 2. Businesses can easily target tribes relevant to their brand with prospective customers and create multiple niche markets for their products. 3. Businesses can build relationships with tribal owners and, with their endorsement, sell directly to their members and avoid being labeled a spammer. Endorsements trump ads. Facebook and other social networks force advertising without consent and Facebook charges businesses for access to their communities. 4. Businesses can imbed their tribe on their corporate website and protect their brand. Facebook forces companies to link their brand with them and locate on their site. For example, a typical URL is: https://www.facebook.com/CocaCola. Competitors include Facebook, Pinterest, RebelMouse, cyPOP, Pheed, Tumblr, Reddit, Craigslist, eBay, and Groupon.
PROOF OF CONCEPT: Kumbuya launched their website to the public on September 17, 2012. They’ve already attracted tens of thousands of users within their first 5 months of operation.
CUSTOMERS/USERS: Currently, Kumbuya has approximately 2700 tribes, 27,000 users, 140,000 unique visitors, and 1 million page views. They convert about 20% of visitors to users and expect to reach 100,000 users in 6 weeks. The following influential celebrities and companies have set up tribes on their site: the Huffington Post, actresses Emma Roberts and Alessandra Torresani, world-famous photographer Tyler Shields, and Chicago sports teams. Kumbuya projects 45 million users in 5 years. Kumbaya is growing faster than Pinterest at a comparable stage.
STRATEGIC PARTNERS: Kumbuya is in advanced negotiations with a major organization that would bring them national exposure.
FUNDING: Kumbuya raised $675,000 from four investors in their first round of financing. They’re seeking $500,000 in their second round of funding and have raised $300,000 to date. The money will be allocated to customer service of major accounts and development of an app.
SUMMARY: Kumbuya is adding users quickly and drawing attention from influential celebrities and companies. They have been efficient in converting visitors to users. The main question in 2013 is whether they can convert users to customers and prove their revenue model.