Secret

What did it do?

Secret was an app that let iOS and Android users share anonymous messages with their friends, friends of friends or everyone. What set it apart from rivals such as Whisper was that posts were shown first and foremost to the user's own circle of acquaintances. In early 2014 the app became one of the most talked-about products in Silicon Valley.

Why did it shut down?

One of the app's most prominent uses turned out to be spreading unverified rumours about people and companies, which drew harsh criticism in the press. In August 2014 a court in Brazil issued an injunction banning distribution of the app following complaints of bullying. In December 2014 the company tried to change course with a new version featuring chat, after which co-founder Chrys Bader-Wechseler left. As usage fell, David Byttow shut the company down on 29 April 2015, saying the way people were using the app did not match his original vision.

The story

In December 2013 TechCrunch, working from an SEC filing, reported that David Byttow, former head of Square Wallet, and Chrys Bader-Wechseler, a former product manager at Google, had raised $1.2 million. Nobody even knew what the start-up did; true to its name, Secret was a secret. When the curtain lifted in February 2014, Silicon Valley met its new obsession: an app that let you post anonymously to your circle of friends.

What made Secret different was that anonymous messages were shown not to strangers but first and foremost to your friends and their friends. That made every post you read more intriguing. Investors quickly lined up: Kleiner Perkins, Google Ventures and Index Ventures were in the first round. In March 2014, when the company had only three employees, an $8.6 million Series A closed; a $25 million Series B followed in July 2014, taking total investment to around $35 million. In its report on the closure, Forbes called it "the $100 million social app".

But the dark side of anonymity soon showed itself. The app became a vehicle for spreading rumours about people and companies; journalist Sarah Lacy criticised this use sharply on PandoDaily. In August 2014 a court in Brazil, at the request of prosecutors, issued an injunction banning distribution of the app following complaints of bullying. The company tightened its photo rules, improved content screening and in December 2014 announced a new version featuring chat. Shortly afterwards Bader-Wechseler left the company. In March 2015 TechCrunch reported that the company was working on new apps and would not shut down its main product; a month later, the decision was reversed.

On 29 April 2015 Byttow announced his decision to shut the company down, saying the way people were using the app did not match his original vision. He said he planned to return the remaining money to investors and delete user data. The New York Times read the closure as an example of Silicon Valley companies that flare up and burn out in an instant, and noted that the founders had each cashed out $3 million of shares in an earlier round.

Secret is a striking example of how it is users, not founders, who decide how a product is actually used. Anonymity drew attention, but the same feature also wore away the app's reputation and user loyalty.

Lessons for founders

• With user-generated content, design moderation and abuse scenarios before launch; filters added later will not win back a lost reputation.
• Regularly measure, from samples of content in the first weeks, which behaviours a powerful feature such as anonymity is rewarding.
• In Turkey, orders blocking access to content that violates personal rights can be issued quickly; treat legal risk as part of product design.

Sources

1. Secret (app) (Wikipedia)
2. A Founder of Secret, the Anonymous Social App, Is Shutting It Down (The New York Times, 2015-04-29)
3. Secret, The $100 Million Social App, Shuts Down (Forbes, 2015-04-29)

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