A key hypothesis of my founding team at Vsho was that we would be able to grow our social media startup leanly. We found that not to be the case, and I wonder if we’re entering a new era of needing a lot of capital to grow and scale social media companies. Engineering costs, AWS costs, and content creator costs were three reasons why we needed to take on more cash.

For background, we created Vsho to be the destination for product review communities. Our mission was to enable people to participate in product trends within their communities. These communities came together around products, whether it be children’s toys, specific beauty verticals, or running gear. Although we brought on influencers, we believed any one in the community would want to create and share a video of a product they loved in order to help their community and receive compensation from the referrals. In this way, we gave people a platform to take part in these conversations and celebrate their identities through short-form video.

Engineering costs

Although all app companies will need to expend cash to build an app in the first place, we found our distinct design and social media focused application required more engineering time than other app types. We believe that a novel and modern consumer app should push the boundaries of modern app design. This required additional user testing and demoing in order to maintain a balance of familiar design patterns but also create a distinct brand of Vsho. Additionally, to ship an app to the Apple app store, one must conform to policies to combat abuse in user-generated content. Although I understand the need for standards from Apple and I fully support them, it is nontrivial for tiny startups to build in the extra functionality. As an aside, even Instagram has trouble conforming to these standards technically. I’ve found that despite blocking people from my stories feed, they sometimes pop up for a few microseconds as my home page is loading. We spent a lot of extra development time focusing on these standards, even though we didn’t really need it. We spent manual time analyzing our content and users for user research purposes, and were ready to eject anyone out of the ecosystem at any time. This wouldn’t scale, but also wouldn’t be a problem until we started growing. It seemed unfair to build in these tools at our stage.

AWS costs

Next, AWS is expensive for data-intensive companies, like ones that require video. I would have liked to experiment with their new live video product, but it didn’t make sense with our cash spend and our experimentation timeline.

Content creator costs

Lastly, and most importantly, we needed to fund high quality content. Originally, we hoped that we could partner with core communities members in existing communities (like on Discords, subreddits, and Slack channels) and small creators (<5k followers on TikTok or Instagram) to create our first batches of content. However, we ran into a catch-22: many people were not motivated to stay in the app and create in the app, since there was limited content to begin with in the application. We couldn’t rely on intrinsic motivations (a motivation that derives from own desires to complete a goal), and instead pivoted to focus on extrinsic motivations (derives from environment, e.g. $$). This heavily increased our spending, and I don’t believe we could have gotten around our catch-22 otherwise.

•

In conclusion, if I were to do a social media company again, I’d focus on capitalizing it before launching to user 100+.