Almost all our success at Klout can be tied to a couple strategic decisions that almost no one knows about. A quick thread on how we leveraged our funding to create a clear competitive advantage

When I started the company it seemed like anyone smart enough to know how to hit the twitter api and work a calculator had built an influence tracker

It was far from guaranteed that we were going to win the space (though the name really clicked with the public and gave us an early lead). We ended up being the first company in the space to raise money. A $1.5m series A.

One of the first things we did was meet with Twitter and tell them we wanted to start paying for data. At that point I think only Google and Microsoft was paying for access.

Why go to a supplier and raise your operating expenses? When you can turn it into a barrier of entry for your competitors.

We set what felt like a high price ($20k a month if i recall correctly) and made sure that our contract stipulated that anyone else using the data for the same reason had to also pay. This instantly made it hard for all unfunded startups to compete.

Shortly after that a new set of vendors emerged to resale twitter data. We struck deals with the two biggest companies in this space (Gnip and Datasift) where any customer who bought Twitter data from them got Klout data for free by default.

We sacrificed some data revenue but these were exclusive deals where they couldn't distribute any other influence scores.

With these two moves we made it basically impossible for any new competitors to emerge and for any current competitor to get distribution.

Both of these moves were made possible by having funding that let us play the long game vs optimizing for revenue. Definitely recommend thinking about how you might use funds for things like this vs just hiring more people and increasing burn