It seems like the storyline of a Sex and the City episode – a young Australian woman moves to New York City and decides to build her dream, which just so happens to revolve around helping other young women her age land their ‘dream man’ – hopefully minus the drama.
It wasn’t quite like that for Australian born entrepreneur Lisa Winning. Growing up in Sydney’s North Shore, Winning, at the age of 18, packed up and made a move to London where she studied at the London School of Economics. After graduating from LSE, Winning had the opportunity to work for a startup called Quintessentially.com, which is a technology based company specialising in Luxury Lifestyle Management and Concierge Services founded by Aaron Simpson, Paul Drummond and Ben Elliot.
Working directly under Ben Elliot, who is a self-made multi-millionaire and the nephew of Camilla, Duchess of Cornwell, Winning says that she fell in love with startups being able to watch and learn from him. Elliot is also widely known for his philanthropic nature, and that certainly must have rubbed off on Winning too, as she is part of the Junior Committee of the Clinton Foundation, is on the Advisory Board of the Youth Assembly at the United Nations and sits on the board of LGBT platform, Pride Live Nation.
Winning is now based in the United States. She and co-founder Carrie Henderson McDermott have recently relocated themselves and their startup, HeTexted, from the bright lights of New York City, to the world’s tech-company epicentre in Silicon Valley. HeTexted is a web and mobile application that plays in the space of ‘situation-based advice’. It gives users answers to the questions they care about the most.
The way it works is users upload a situation, whether that be a ‘guy’ related dilemma, or a text that they have received from a man, and give a little bit of supporting information. Then users ask for advice – like how should they respond to a text, or what is the sub-text of that text – which other users of the platform provide. And its a hit, especially in the 18 to 26 year old woman demographic. Winning and McDermott believe the reason the startup has gained instant market traction is because of the universal need for advice, validation and sharing of experiences.
McDermott is a former Beauty Editor from Conde Nast and was the company’s first hire. McDermott came on board as a co-founder and Winning said that her “influence runs through the company’s DNA”. McDermott has been responsible for leading the company’s deals with William Morris Endeavor, Simon and Schuster and Penguin Random House.
These relationships have enabled HeTexted to become much more than just a tech-startup; it has become a fast growing pop-culture ‘brand’ unto itself. William Morris is one of the US’ top tier talent agencies, representing individuals like Zach Galifinakas and programs like It’s Always Sunny in Philadelphia. But it is the agency’s growing portfolio of representing online, content-based brands like The Onion, that I find really interesting.
There is plenty of chatter around how HeTexted and its content could be used to create a movie / television show by Hollywood studios. The relationship with Penguin Random House already means that the company’s founders are published authors with a book called He Texted: The Ultimate Guide to Decoding Guys – a seriously savvy content marketing strategy, if you ask me. Partnerships like this take a startup beyond being a service or a one-dimensional online media entity and make them part of the pop-culture narrative. Just look at what users from Instagram and YouTube have been able to do. I see similar situations arising from HeTexted.
Whilst HeTexted was reluctant to talk about fundraising numbers at the moment, here is what we do know. The startup is currently raising the second half of its seed funding round. A lightning round of $500,000 has already been raised by the New York Angels (a top ten most active angel group in the world) and 37 Angels (a community of female investors that fund early stage startups). But the most recent investment and the one that has taken HeTexted from New York to Palo Alto comes from 500 Startups and Dave McClure.
It is Startup Daily’s understanding that originally HeTexted was looking to raise a further $400,000 on top of the current lightning round, bringing investment to a total of $900,000 in seed funding. However, since being accepted into the 500 Startups eleventh accelerator batch and with McClure being attached to the venture, this has accelerated progress and interest.
Right now, HeTexted is oversubscribed and looks like it will close out this round with much more than the expected $400,000 the team was originally aiming for. Winning says that due to the round being finalised, she was unable to discuss the specific number. Sources have also told Startup Daily that when it is announced, the story will be broken by TechCrunch who are said to have secured the exclusive.
The reason that HeTexted is piquing the interest of investors like McClure is because the startup has some pretty compelling metrics. First and foremost, the stickiness of the product is a major factor. There are 70,000 women using the product at the moment and those people have returned and used the product on average 200 times each. HeTexted has seen over 3 million user sessions take place so far and the community has answered over 200,000 dating and relationship questions.
Winning told Startup Daily that one of the greatest things about the current investors that she is currently speaking to is that they all understand the potential market size of where situation based advice is heading. From a monetisation perspective, Winning says that in 2015 they will begin doing this. HeTexted is already testing out revenue across a paid advice feature.
The site currently has 30 private advisors that give one-on-one advice on the site, some of the more popular of the 30 include standup comedian Jared Fried, musician Finn McGill and writer Kadeem Hylton. This is one of the busiest parts of the HeTexted service with Winning claiming that there has been over 150,000 back and forth sessions between users asking for private answers from HeTexted’s advisors.
Potentially, extending the private advisory options and adding some high profile people to the mix, possibly even celebrities could be a good revenue strategy for the startup. It could even assist in helping it reach the 1 million user mark. In addition to paid advice, Winning has also mentioned that the startup is beginning to be approached by advertisers – something, given the startups highly sought after audience, makes complete sense and if integrated right could see some very healthy financial results.
Of course, there are brand extension plays that have already started yielding results. The first book deal was brokered with a six figure advance and if a film deal ever goes ahead, a licence option to make that movie would see a minimum payment of at least $200,000 – more if it ends up being a hit. Not to mention the publicity the film would generate, and the perceived value that would create around the business.
Just like HeTexted is starting to see already, there will be value in breaking down and understanding the data from these platforms. For example, HeTexted has been able to pull out deep, rich user data on its users relationships, spending habits, locations and messaging platform use – this is highly valuable when talking to advertisers and future partners that want to target an audience.
HeTexted is perhaps one of the most interesting startups to watch as we head towards 2015, I think that the ‘situation based advice’ is a play that we will see popping up across other verticals once the news of the startups funding filters throughout mainstream media and I believe that some of those verticals like Parenting, DIY, IT and Fashion will see significant traction.