Dana Severson, a onetime business marketer and freelance writer, is gaining notoriety -- if not big revenue -- at the intersection of social media and finance for his "Wahooly.com" -- a start-up business that matches online "influencers" who can draw attention to fledgling businesses.
"We're like Kickstarter, only instead of people contributing money, we
try to influence money," Severson said.
Severson's outfit launched last year with $750,000 invested by individual
"angel" investors. The six-person company is based in a small office in St.
Michael, about a half-hour northwest of downtown Minneapolis.
A few weeks ago, Wahooly announced an expanded partnership with Klout.com
that will allow Wahooly to connect influential online users to more-mature
start-ups. The idea is to "create an online marketplace of rewards for
promoting and helping those start-ups."
Klout is a company that scores how influential people are online by
tracking a person's visibility on Facebook ("likes" or "friends"), Twitter
("retweets" or "followers") or LinkedIn ("job title," "connections" and
"recommenders"), among other metrics. A mention on Wikipedia helps a lot, for
example.
The person's digital footprint is calculated on a scale of 1 to 100.
(President Obama is a 99.)
So where does Wahooly.com fit in?
"We select companies through an application process and only work with
people in the top 10 percent of online influence. We measure influence through
Klout."
Wahooly plans to make long-term money by getting a stake in companies it
promotes.
"We take a small percentage of equity [1 to 8 percent] in each company on
our platform ... an average of $75,000 worth of shares," Severson said. "Much
like a private equity fund. We retain half of the cash generated from the
liquidity events."
So far, Wahooly has 32,000 social influencers involved, he said, and more
than 700 start-ups have applied to be part of the program. "Of those who
applied, we accepted 24 to date," Severson said. "We have a goal of 150
start-ups in our program by the end of 2013."
One of the companies Wahooly has taken a stake in is Frostbox, a British
company that backs up Facebook pages and other online data.
"Until they came to Wahooly, they were pretty unknown, but they have a
valuable product," Severson said. "We launched them on Wahooly.com, in
partnership with Klout. Within 48 hours, we had 2,000 influencers who were
participating in the Frostbox on our system. Those 2,000 people are all
working to make Frostbox more popular. They do that through Twitter and
Facebook. We track those 2,000 people, and we reward them with points, based
on how impactful their messages [are]."
The Payoff
If Frostbox has a liquidity event, such as an acquisition or an IPO,
Wahooly would take half of the net result, Severson said. "Say it's $1
million; we would share $500,000," he said.
Wahooly's influencers potentially could get a small slice of the action,
depending upon how influential they are. And influencers who don't want to
hang on to a tiny slice of risky private stock can choose in some instances to
get a smartphone or other product through the Wahooly-Klout connection.
"If you've helped a young company gain traction, you can theoretically
get something back right away," Severson said.
Wahooly is interesting enough to have merited coverage from online
publications such as Venture Beat and Mashable. Last year, Klout CEO Joe
Fernandez told Mashable that his users "tend to be some of the most passionate
early adopters on the Web and love having access to exciting new products like
Wahooly."
The trade publications also raised ethical questions about whether
Klout-Wahooly influencers should disclose their relationship with Wahooly when
they're praising Wahooly-promoted companies.
"We automatically disclose with a 'disclosure bar' on that person's page
... the relationship with our company," Severson said. "It's a much bigger
debate within the industry, but we play by those rules."
Severson, 36, married and the father of three kids, has worked in
advertising and also wrote a monthly magazine column about entrepreneurs. He's
paying himself less than his old day job, but he had to find out if he could
succeed with his innovation in the start-up world.
"The biggest challenge for young companies is investment and traction and
momentum," Severson said. "In the tech world ... you need customers and users.
And it's difficult to figure out which one comes first."
