TinyBeans raises AUD$2 million; company becomes clear on its commercial strategy

- September 30, 2014 5 MIN READ

I had literally just started Shoe String Media when I first met Stephen O’Young for a coffee and interview about his new ‘app’ – then named TinyBean Kids. At the time, it was still being built – a concept if you will – but O’Young’s passion for the cause was clear as he informed me of the inspiration behind why he was creating the business and some interesting statistics on how many Facebook users hated seeing babies in their newsfeed.

At it’s core, the premise of the business has not changed. TinyBeans (the Kids was eventually dropped) is a private social network for parents, their families and friends. This is called the ‘Nurture Network’ and allows parents to share their children’s milestones with people and create content that matters to that private network. At its heart, TinyBeans has been designed so that family and friends can provide encouragement and support as a user’s child grows.

In 2012 the startup was accepted into the Pushstart program. Pushstart pivoted after its first intake had graduated and are now serving as a support network for the Australian startup community.

From that 2012 class of startups, other than Make Tonight Count (Tonight App) which is still live and gaining minimal traction, focusing on the European market and Werdsmith, founded by Nathan Tesler, which has always been a consistent performer within it’s niche market – TinyBeans is the only remaining startup in operation and is the only company still headquartered and focused heavily on the Australian market.

Without the Pushstart program, O’Young and cofounder Sarah-Jane Kurtini would not have met Eddie Geller, and had him join the team as their third co-founder. Geller now serves as the CEO and was originally involved in the business as an investor and mentor via Pushstart. Geller is a gifted CEO and founder with a stellar track record, selling his consulting company Unique World to Jacobs Engineering Group in 2011, and that same year Jacobs delivered USD$10 billion in revenue.

Today’s funding announcement represents the culmination of a lot of focused activity on building a solid foundation, getting the company ‘investor ready’ according to Geller.

Other than the AUD$20,000 seed funding from the 2012 incubator program, TinyBeans has bootstrapped its way to 500,000 users across the platform. While over 50 percent of the users are based in the United States, the application has people getting in on all the TinyBeans action in 188 countries across the world, from Argentina to the Isle of Man.

TinyBeans plans to use the funding to continue the company mission of helping families raise their children by providing them with useful and relevant information, as well as tools and products to support them through various development milestones of their children. The team also seem a lot more certain about their monetisation strategies for the future. They’re opting for a product approach, allowing users to create items such as photo books as gifts from their unique and personal TinyBeans content stream – instead of going down the path of banner advertising. Geller believes that over the next six months, TinyBeans will reach the 1 million user mark; and at this capacity, the product approach becomes a scalable income opportunity for the business.

Native advertising and strategic partnerships that make sense to the users and marketplace, have not been ruled out as a revenue option at this point though.

There is one major and overarching reason though that TinyBeans is an important social media network. It all centres around the privacy aspect. Or more to the point the risk factor in which users of other social network sites are able to have copies of photos of their children stolen and copied.

Role playing with stolen baby and toddler photographs on the internet is becoming a sick and sinister phenomenon. It is one of the reasons behind celebrity couple Sam Worthington and Lara Bingle deleting various aspects of their social media channels recently, after Worthington read a Daily Life article by Fairfax Journalist Kasey Edwards. In the article Edwards explores the actions of people involved ‘baby role playing’:

In baby role-playing, people steal photos of babies, and in some cases, older children, from social media sites and make them the subject of a role-playing game.

There are even virtual ‘adoption agencies’ where role-players invent names for the babies, along with physical details, such as birth weight, and also how the child came to be in the adoption agency.

Other people will then ‘adopt’ the children so they can create their dream family. In an open role-play, known as  #openrp, anyone on Instragram can then chip in with what happens to the child.

For example, underneath a (presumably) stolen photo of a newborn in intensive care with tubes coming out of its tiny body, is this story: ‘my mother had me trying to kill me in the hospital bathroom. She had me and left me in the toilet. Luckily I clogged the toilet…I need a mommy’.

Sometimes the comments in the role-play are about the mundane activities of caring for a baby such as changing its nappy or telling it how clever and beautiful it is.

But not always. A Canadian mother discovered pictures of her five month old in a role-play. The comments were about how the child looked ugly and disabled.

More disturbingly, some role-plays veer into fantasies about physical and sexual abuse.

Fast Company reports that people can even request the type of baby they’d like to adopt and then the ‘adoption agency’ will trawl the internet to find a photo matching the description. ‘Looking for a two-year-old girl with blonde hair, green eyes, and who is feisty,’ is one such example.

Kurtini, TinyBeans head of marketing says that situations like this are a big part of why TinyBeans is a private social media network – the only people that will ever see the images and videos are the user and those of whom they choose to share them with. At anytime, the user can block anyone from their account with immediate effect.

It makes sense that a niche private social media network playing in this space would be experiencing rapid growth, given the above.

TinyBeans has raised their money from a ‘consortium of high net-worth private investors’. The team is not discussing who these individuals are at the moment. Looking at Tiny Beans Group Pty Ltd publicly available ASIC extract – the company which owns TinyBeans Pty Ltd – it appears that the new shareholder paperwork may still be in the process of being submitted to ASIC. Currently, the founders and Pushstart are the only listed shareholders. Kurtini and Geller did tell Startup Daily, however, that the majority of investors were from the Australian and Asian region.

It was also confirmed that a few of them had experience in the child product and services space, which would serve as great guides as the company grows and begins to look at other income streams in the market.

Right now the team is preparing to ramp up their presence in the United States; this plan includes a US base of operations – a key to acquiring the next 500,000 customers.

Listen to our interview on the funding round with TinyBeans here:

NOTE: Further to my commentary Make Tonight Count is no longer live. Adbidx is going great guns and GimmeQuotes are both however still live and operational I have been informed since publishing.