Sometimes a start-up turns out to be a smart move. But there were also small businesses that saw at first a huge rise, and in the end they popped like a bubble. A good example is the Branchout network, which attracted over eight million users in just four months and made $25 million. Things are completely different now. Branchout, a Facebook application for finding jobs, has benefited from media buzz and attracted investors from the very beginning. It grew up quickly, from the 400,000 users in December 2011, to over eight million in April 2012.
The social network was perceived by many users in the corporate and enterprise environment as “a breath of oxygen” and a platform for professionals that successfully combines social need with professional relationships. Initially, the founder of Branchout, Rick Marini, has attracted over 25 investors. The social network produced $25 million in just four months. The impressive growth has decreased dramatically in the last two months, May and June. Less than half of the users are active every month (nearly 2.7 million).
What was the cause of the unexpected collapse of the start-up in the last year? According to Business Insider, Marini believes that the business was wrong when not focusing on retaining customers. At first, the manager was responsible for attracting users, which increased the investor’s interest. But its users have not remained loyal to the network after they have joined the community, they were not attached to the brand.
A month and a half ago, Marini realized that they have to do something about it. He employed several salespeople and technical staff, knowing that his network has increasingly suffered. At this time, Branchout employees are working on a project to redesign the network concept, which will be launched in a few months. “In order to build a company to survive over time, you must meet three conditions. First, be willing to invest in acquisitions. The second is the customer loyalty. And the third is monetization. We have stopped at first. Now we have to get to the next step, “Rick Marini told Business Insider.
Asked why he did not make this movement before, the founder said: “Last six months we tried to maintain the social network at a high level. You can not predict the rapid growth or drastic slowdown of a project. Although you need to deal with many things at the same time, sometimes things just don’t go your way as planned and you have no choice. At some point, you must have the courage to accept the fact that you have problems and do something about it.”
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