It is time to BeReal.
Move over TikTok, there’s a hot new social media platform in town.
Well, it’s not that new. It was released in 2020. But 2022 has been the year that the world decided to BeReal.
And if the ultimate sign that you’ve made it in social media is when Mark Zuckerberg and Facebook try to copy you, well BeReal can now tick that off their list.
But with 53 million downloads and monthly active users up more than 2,000% since January, we thought it was time to explore the business behind the hottest social media app of the year.
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Sascha: [00:00:03] From Equity Mates media. This is the dive. I'm your host, Sascha Kelley. It's time to be real. Move over. TikTok. There's a hot new social media platform in town. Well, it's not that new. It was released in 2020. But 2022 has been the year that the world decided to BeReal. And if the ultimate sign that you've made it in social media is when Mark Zuckerberg and Facebook try to copy you. Well, BeReal. Can now take that off their list. But with 53 million downloads and monthly active users up more than 2,000% since January, we thought it was time to explore the business behind the hottest social media app of the year. It's Monday, the 17th of October. And today, I want to know, is it time for the world to be real? To do this, I'm joined by my colleague and the co-founder of Equity Mates and Budding Be Real Influencer. It's Alec Renahan. Alec, welcome to The Dive.
Alec: [00:01:00] Sascha, good to be here. Excited about being real. I was surprised that I introduce you to be real. You hadn't really you'd heard of it, but you hadn't really got into it.
Sascha: [00:01:09] I hadn't. Because, Alec, I do not need to be addicted to anything else in my life.
Alec: [00:01:14] But to BeReal just once a day. It's just once a day. And then everything vanishes and it starts all over again anyway.
Sascha: [00:01:20] The next 10 minutes to convince me. All right. All right. So for those unfamiliar like myself, be real. What is it?
Audio Clip: [00:01:26] Here's the real deal. Once a day at a random time, users get a notification that simply says, Time to BeReal. That moment, you've got 2 minutes to snap a pic.
Alec: [00:01:37] So that was developed in France, which is a nice change from our U.S. centric tech ecosystem.
Sascha: [00:01:43] Getting out of Silicon Valley.
Alec: [00:01:44] Yes. And the concept is super simple. Once a day, you get a notification. Time to BeReal. And you have 2 minutes to take out your phone and show your friends what you're doing. The app takes a photo of both with both your front and back camera at the same time. Only your friends can see it when you post. And interestingly, if you don't post, you don't see anyone else's post.
Sascha: [00:02:07] All right. Most of my day is spent sitting at my desk, you know, just looking at the wall, looking at my screen. I can't imagine I'd have the most interesting BeReal feed.
Alec: [00:02:17] There's beauty in the mundane, though, Sascha. That's the beauty of the app. It's the point of the app. It is explicitly it advertises itself as the anti Instagram, you know, Instagram where influencers manicure and Photoshop their lives. They present this unattainable view of how they live. There really is the opposite. It's only your friends, number one. And it's often quite boring photos of people living their day to day lives at home, in front of the TV, at work, at the shops. People probably share way too much of their work when they take photos of their screens. I'm just thinking about some of the BeReal I've seen emails, spreadsheets, documents. But aside from that information security problem, it's boring. And boring is beautiful.
Audio Clip: [00:03:01] Growing up in the social media generation today, young people are filtering, face tuning and feeling immense pressure to portray picture perfect lives. Now one app is attempting to change all that. It's called BeReal, the social media app encouraging users to just be real.
Sascha: [00:03:19] So Be Real was launched two years ago in 2020, but it's only really become popular this year. How popular are we talking?
Alec: [00:03:28] So I think this number really sums it up. In its lifetime, Brazil has had 53 million downloads, 27 million of those, just over 50% have been in August and September of this year. Its monthly active users are up 2,254% since January. This has been BeReal's year.
Sascha: [00:03:49] Yeah, so really flavour of the month or the last two months as you're saying. Yeah. And this was perhaps the most surprising number to me. The app is valued at 600 million. Despite having no revenue. It's free to download. There are no ads on the platform. It's unbelievable the valuation you can get in quotes pre revenue. We might be seeing our first pre-revenue unicorn emerge.
Alec: [00:04:15] Yeah, Unicorn Start-Up valued at over $1,000,000,000. We had a think in the office about another Start-Up that's reached $1,000,000,000 valuation. Before it's brought in $1 of revenue. We couldn't think of one. There may be one out there, but this may be the first. If it keeps growing, if we've forgotten one day Amazon Instagram I guess.
Sascha: [00:04:37] Can't DM you on BeReal?
Alec: [00:04:38] No.
Sascha: [00:04:40] Okay. Just clarifying.
Alec: [00:04:41] That is a good clarification.
Audio Clip: [00:04:43] BeReal aims to humanise social media showing people a more realistic version of their friends lives. Their tagline is It's now possible on BeReal, no filters, no likes, no followers, no bullshit, no ads, just your friends for real.
Alec: [00:04:58] It's been a pretty meteoric. So in April, B-Real raised $30 million in a round led by Andreessen Horowitz. Then in May, just one month later, BeReal raised another $85 million at a $600 million valuation all before they brought $1 into the door.
Sascha: [00:05:20] So much for this market downturn, and venture capitalists are just getting more cautious. Is that all a myth?
Alec: [00:05:27] An app? Is this hot? They say is get excited no matter what the market's doing.
Sascha: [00:05:32] Obviously, they see this explosion in users that over 20% and get excited. But does BeReal have plans to make money? How will Andreessen Horowitz and other investors actually see any returns?
Alec: [00:05:46] Yes, I'm sure they have plans to make money. It's difficult to know because BeReal, the founders have actually been super cagey. Interestingly enough, whenever they get interview requests, the company sends back a two page fact sheet that the founders haven't done a lot of media.
Sascha: [00:06:01] That's such a power move.
Alec: [00:06:02] It is.
Sascha: [00:06:03] It is just is something I've prepared earlier. Maybe there's not going to talk about it. Alec: [00:06:07] Maybe they'll start doing it on b-real. Hmm. Probably difficult to do with the b-real functionality. But. But look, in general, social media apps have a few ways to make money. Users can pay to download the app by. Sascha: [00:06:19] Yeah.
Alec: [00:06:19] Users can pay for additional features in the upper premium.
Sascha: [00:06:23] Model like Spotify, where you're paying to not have ads, that kind of thing. Yeah.
Alec: [00:06:27] Or you can just be served up ads, the Facebook Instagram model.
Sascha: [00:06:32] But if you're only seeing your friends posts, then it's hard to be seeing the accounts that are going to be ads.
Alec: [00:06:38] Well, I mean, they could put ads in the feed. Still, you scroll, you say to two of your friends, you say an ad for or whatever. To my friends. Another ad like that. That is a way they could do it. Or it could be you either post or you watch a 32nd video, and then you can say you're friends if you don't want to post. Like there's ways you could integrate ads into the platform. But the long and short of it is we haven't seen it yet. But if any app has this many users and this much attention and can keep this much attention, that's the key caveat. They'll find a way to advertise.
Sascha: [00:07:11] But it's not just VCs and Gen Z that are getting excited by BeReal. All of the social media giants, Facebook, Snapchat, TikTok, they're sitting up and taking notice. So let's take a break and then let's look at the rise of the b-real copycats. I guess the bee fakes.
Audio Clip: [00:07:31] Over the last ten years, Facebook, Snapchat and Instagram have dominated the social space, especially when it comes to sharing photos. Ten years on, photo sharing is all about perfection. Editing your snaps until there's no defects and making sure the lighting is on point. But now there's a new app that encourages its users to be real
Sascha: [00:07:51] Welcome back to The Dive. Today, we're talking about the business story behind the hottest new social media app. BeReal, as has happened time and time again in the world of social media. Be real is seeing all the big platforms copy its features?
Alec: [00:08:06] We are. But before we feel too bad for BeReal, we should say that many of their features have been borrowed from social apps that came before them. There's nothing new in this world, Sascha.
Sascha: [00:08:17] So I'm not playing my tiny violin yet?
Alec: [00:08:19] No, not yet. So taking a photo with your front and back camera at the same time was used by the now shut down app. Front back. Original title from the the idea of you have to post to be able to view what your friends are posting. That feature has been used by Facebook before in this Snapchat clone slingshot. Encouraging you to take one photo of yourself everyday is a lot like Daily Booth, which shuttered in 2012.
Sascha: [00:08:49] And I think I've seen a bit of a trend in the past on Instagram where people do like a photo, a day challenge for the year or a full second clip a day challenge.
Alec: [00:08:58] Yeah, yeah, yeah. So nothing new in this world. In saying that the copycats are coming for BeReal.
Sascha: [00:09:06] Okay, so what is out there at the moment trying to copy them?
Alec: [00:09:09] Well, Meta, I'm Mark Zuckerberg. Top of the list. So Instagram has started a BeReal clone called dual camera, like a BeReal clone feature.
Sascha: [00:09:19] Okay.
Alec: [00:09:20] And they've also started an IG candid challenge.
Sascha: [00:09:23] They just really need more creative names.
Alec: [00:09:26] Yeah, I know. Anyway, so the dual camera is in Instagram reels, and visually it looks exactly the same as bay reels visual, but I think it can do video as well. So a little bit different there. And then the IG candid challenge is literally exactly the same quote every day at a different time. Get a notification to capture and share a photo in 2 minutes. It's exactly like they reveal. All right. And then once you take it, it will appear on Instagram stories. They're just testing it internally at the moment. But Instagram are doing it the BeReal clone.
Sascha: [00:10:01] Which is pretty ironic because BeReal is marketing itself, as you said, as the anti Instagram.
Alec: [00:10:07] Yes, very ironic, but not surprising yet.
Sascha: [00:10:10] Not surprising at all.
Alec: [00:10:12] So Snapchat, they also have a feature that looks very similar to BeReal. They've actually had it for a little while being able to take a photo with your front and back camera at the same time. But since BeReal has jumped up in popularity, they're now really promoting the feature. It was a subsection. I was trying to figure it out. It was subsection of subsection, and now it's its own thing. It's called dual camera. Very creative.
Sascha: [00:10:39] Again.
Alec: [00:10:39] But unlike BeReal and unlike Instagram, there's no daily prompts. They're just letting you take photos with front and back camera as much as you want.
Sascha: [00:10:48] Okay. Yeah. So you can just plaster your feed with lots of photos of your wall if you want.
Alec: [00:10:52] Mm hmm. And Tikok is also getting into the BeReal cloning game. They've launched an app, TikTok. Now, outside of America. It's a standalone app. In America, it's part of the Tiktok app, but it's again, almost exactly the same. You get a daily prompts and you can either take a photo or you can capture a 10/2 video. Sascha: [00:11:15] And some of these copycats, they might have a lot of success because while BeReall is soaring up the charts with its downloads, its daily active user numbers lag behind many of the bigger social platforms.
Alec: [00:11:27] Yes. So just 9% of BeReal users are using the app daily, which is really low compared to all of their social media peers. That compares to 18% for Twitter. 20% for YouTube. 26% for Snapchat. 27% for Facebook. 29% for TikTok, 39% for Instagram. So it's hot at the moment. It's getting a lot of downloads, it's growing, but it seems like once people are downloading it, they're perhaps not staying on it as long as an Instagram or TikTok
Sascha: [00:12:01] Yeah. So the big question then is, is this a fad or is this here to stay?
Alec: [00:12:06] That is the million dollar question.
Sascha: [00:12:09] The 600 million.
Alec: [00:12:10] $600 million question. Yeah, look, the growth is real. There's no denying that. But they need to figure out a way to make money because the world is littered with fad social media apps that had their moment in the sun. We mentioned front back before the creatively named app that pioneered taking a photo with both cameras at the same time. They raised $4 million. Then the. He rejected a $40 million acquisition offer from Twitter. And then they shut down within two years. Oh.
Sascha: [00:12:38] You know, the world of start-ups is just littered with those kind of stories.
Alec: [00:12:41] I know. I know. Well, here's an opposite one.
Sascha: [00:12:44] Okay.
Alec: [00:12:44] Did you remember the app tab?
Sascha: [00:12:46] I don't, but I guess you're going to tell me why I don't remember it.
Alec: [00:12:50] Well, so there were an anonymous social media app they launched in September 2017, racked up more than 5 million downloads and 2.5 million daily active users, and were acquired one month later by Facebook in October 2017 for a reported hundred million dollars.
Sascha: [00:13:10] Oh, that must be nice.
Alec: [00:13:12] Eight months later, Facebook shut it down.
Sascha: [00:13:14] Wow. Yeah. That's a really expensive shutdown. Yeah.
Alec: [00:13:19] One more recent one. Do you remember the early days of COVID? We were all using Houseparty.
Sascha: [00:13:23] Oh, I spent hours on Houseparty.
Alec: [00:13:27] Well, you weren't alone. Houseparty. It was actually founded in 2016. It raised $52 million from venture capitalists. Really took off in 2020 when we were all locked down with COVID. Downloaded more than 50 million times in the first six months of 2020. By September 2021, it was shut down.
Sascha: [00:13:47] Wow.
Alec: [00:13:48] So there's a long history of social media apps having a real moment in the sun, raising money, often in this case, exiting at the right time, but then fading off and will return to Instagram, Facebook, and I guess these days. Tik-tok.
Sascha: [00:14:05] Yeah, you would. As you were talking before, it reminded me of Clubhouse, which was all the buzz in audio world maybe, what, a year ago? Yeah. And I haven't seen it making noise for a while.
Alec: [00:14:16] Yeah. So I guess the question is, does burial join this list or will it remain part of the social media equation? And really, it just comes down to one can generate enough revenue to cover its costs and to coin that way to generate revenue, not alienate users, and can it keep them on the platform? And that is the $600 million question.
Sascha: [00:14:39] Well, I'm one of the rare people who hasn't downloaded B-Real yet I like, but I think I'm going to have to go get it and see what all the fuss is about and watch this story closely.
Alec: [00:14:48] Okay. I'll see you there.
Sascha: [00:14:49] I'll see you on BeReal soon. Look, if you enjoyed this episode, then please tell a friend about it. Maybe be if you're listening to it while you be real comes up today, take a screenshot. That'd be awesome. It really is just the best way for our podcast to grow and if you've joined us for the first time, then welcome and go check out our back catalogue. There is no headlines to the episode today, so why don't you go listen to another episode that's passed you by? Go on. You know you want to binge. Remember, you can follow us on Instagram at the Dive Drop Business News. You can contact us by email thedive@equitymates.com And you can subscribe wherever you're listening right now so you never miss an episode. Thanks so much for joining me today and telling me how to be real, Alec.
Alec: [00:15:31] Thanks, Sascha.
Sascha: [00:15:31] Until next time.