Causation and Correlation Between Startup Social Media Activity and Performance????

Welcome back to the latest issue of “The New Wave” by Popstar Ventures! ??Today we will be covering causation and correlation between startup social media activity and performance!??

Y-Combinator CEO Garry Tan stated in a recent interview " If you're running a business today, you have to be a creator"?

Garry Tans background includes:?

-? CEO of Y-Combinator?

- Employee #10 at Palantir

- Startup acquired by Twitter

- 250k subs on YouTube / 500k on X

At Popstar Ventures, we pursue a content first focus, helping founders establish connections between Gen-Z, influencers and corporate partnerships.?

With the added value of inserting athletes, musicians, and influencers into our portfolio companies as brand ambassadors, advisors, and co-founders.?

We’ve seen venture capital veterans like Marc Andreessen embrace influencer led brands, from his recent interview with Fortune.com that celebrity-led brands—from Kim Kardashian’s Skims to Logan Paul’s Prime—are not ‘gimmicks’ but ‘the future of consumer products.?

“Maybe we’re at the beginning of what is a monster wave, and we’ll be sitting here twenty years from now and it will turn out this was basically the great transition, and in the future the brands will actually all be individually led.” - Marc Andreessen

Andreessen sees these brands not as mere gimmicks, but as a new paradigm in consumer product marketing where celebrities and influencers leverage their large followings to directly influence buying decisions

Andreessen argues that the changing media landscape, particularly the rise of social media, enables influencers to build strong connections with their audience, making them effective brand ambassadors.?

Diving into if there is a true correlation between social media activity and success of startups.

94% of business leaders believe that social media has a positive impact on brand loyalty.?

We’ve seen many brands and early stage companies take advantage of having a strong social media presence.?

From the likes of early stage companies to post-IPO companies. Ranging from sports to deep-tech to healthcare, to entertainment, to B2B software, they will all have one commonality, CONTENT.

Inserting influencer into your companies can have a multitude of positive attributes:?

• Businesses are making $5.20 for every $1 spent on influencer marketing while the top 13% of businesses are seeing a revenue of $20 or more for every $1 spent (Influencer Marketing Hub).
• 61% of consumers trust influencer recommendations, compared to 38% who trust branded social media content (Tech Report).

• Gen Z — a demographic aged 16-26 — now makes up 40% of consumers. They are the most “plugged in” generation to date, spending three hours every day on social media consuming and creating content, and most importantly, seeking inspiration. (Forbes)

Duolingo, The Tiktok Darling?

Duolingo is a perfect example of a company taking advantage of social media and seeing significant returns.

23 year old Zaria Parvez took charge of Duolingo’s social media strategy. With her highlighting the Brands mascot, world famous Owl-Duo, which features unique content and viral videos. Zaria has transcended Duolingo's TikTok account to over 13M followers in just three years.?

In Q3, 2021, something clicked for Zaria Parvez and she noticed that TikTok announced it has 1 billion monthly active users and she thought there has to be something here. Then Zaria struck gold, creating content as Duolingo's mascot Duo in partnership with TikTok.?

From going viral on social media and increasing their media presence, Duolingo has seen its stock price rise from January 2022 at $85($3.7B market cap)?to $325($14.2B market cap) on today November 11th 2024. A 280% increase in almost 3 years.?

Not only does duolingo demonstrate that content is king, companies of all sizes have begun strategizing around social media.??

Chamberlain Coffee, Gen-Z’s Favorite Coffee Brand?

Our team's General Partner had the chance to work with Emma Chamberlain and the Chamberlain Coffee team this summer' 24 and they have absolutely crushed being an influencer led brand.?

Emma's global celebrity status holds massive influence with her >25M combined social media following that has allowed her to become a super endorser of the product line. Through influencer marketing Chamberlain Coffee has been endorsed by other major celebrities such as Kendall Jenner, Shawn Mendes, Hailey Bieber, and Jimmy Fallon.?

Chamberlain Coffee is the only major coffee brand specifically speaking to Gen Z. Offering whole bean coffee and has expanded to sell cold brew packets, matcha, chai, ready-to-drink coffees, tea and branded coffee mugs. Chamberlain targets Gen Z through its premium product, eye-catching packaging, quality social media presence, and aligned with beliefs.

Emma Recently collaborated with Kendall Jenner for their Espresso Martini collaboration and social media campaign, which sold out in less than 1 week.?

Whoop- The leading fitness wearable company embracing influencers

Not only has tech savvy startups like Duolingo taken advantage of social media, we’ve seen fitness wearable company Whoop use influencer marketing to a tee.?

Whoop has collaborated with high profile athletes like Michael Phelps and Lebron James.?

By using influencers in the early stages, whoop gained credibility, brand awareness, boosted sales revenue, and strengthened Whoop’s position against competitors long term.

So how did whoop measure the success of these influencer marketing campaigns??

By tracking engagement rate, click-through rate and conversion rate to assess the impact of their collaborations.?

To date, Whoop has raised over $400M and currently sits at a $3.6B valuation. With it’s most recent raise of $200M taking place in 2021.?

In May’ 2024, Soccer phenomenon Cristiano Ronaldo, joined Whoop as a global ambassador and investor.?

• Ronaldo and Whoop will partner on product development and leverage data-driven insights to help deliver health and fitness coaching
• Whoop will now expand to regions outside of the US, including Saudi Arabia, Qatar, Kuwait, and Bahrain, as well as Hong Kong, Israel, Korea and Taiwan. According to Sports Pro Media, the company is also expanding its shipping services to India, Mexico and Brazil.?

Tesla, $0 spent on advertising but utilizes influencer marketing?

Although Tesla does not spend money on advertising, Elon musk is very aware of the role that the culture + content plays in the success of his business.?

Elon has endorsed several influencers and musicians by granting America’s top influencers early access to the new cyber truck.?

By utilizing Influencers and giving influencers early access, Elon has seen popularity for the Cyber Truck explode and has made public endorsements of those who are purchasing and driving the new Cyber Truck like Grammy nominated Rapper Lil Baby.?

What’s next in the world of influencer marketing??

In conclusion, Popstar Ventures believes over the next 20 years that we’ll continue to see an influx of influencers being used to accelerate company growth, build customer credibility and have a long term advantage over competitors. In today’s climate, companies that utilize content win over competitors.?

Within every industry ranging from sports, to deep-tech to healthcare, to entertainment, to B2B software, they will all have one thing in common, CONTENT.

Sources:

How a 23-year-old graduate helped transform Duolingo’s social media marketing, Contagious. (n.d.). https://www.contagious.com/news-and-views/duolingo-social-media-marketing (accessed November 11, 2024).?

M. Hanson, Whoop’s influencer-driven entry into fitness wearables, 303. (2024). https://303.london/blog/whoop-used-influencer-marketing/ (accessed November 11, 2024).?

A. Islam, Cristiano Ronaldo joins whoop as global ambassador and investor, SportsPro. (2024). https://www.sportspromedia.com/news/cristiano-ronaldo-whoop-global-ambassador-investor/ (accessed November 11, 2024).?

S. Mollman, Marc Andreessen argues celebrity-led brands-from Kim Kardashian’s skims to Logan Paul’s prime-are not “gimmicks” but “the future of consumer products,” Fortune. (2023). https://fortune.com/2023/12/09/marc-andreessen-mrbeast-feastables-logan-paul-prime-future-brands-consumer-products/ (accessed November 11, 2024).?

X.com, X (Formerly Twitter). (n.d.). https://x.com/iamgdsa/status/1851338126058537465 (accessed November 11, 2024).