Business World

HOUSEPARTY: THE TEEN VIDEO CHAT APP TAKING ON FACEBOOK

- By Hannah Kuchler

Ben Rubin leans back on his chair in the “living room.” It is really a homely conference room, where a fake window frames a painting of a bucolic view, far from the grubby streets of San Francisco’s south of market district, which is what is really outside.

The 30-year-old chief executive and cofounder of Houseparty, a group video chat app, is talking to me in the company offices, which are designed to look like a house. His has been an unusual career trajectory — from architectu­re student in Israel to a Silicon Valley entreprene­ur in serious competitio­n with Facebook.

Brought up in Israel, where his mother is a well-known food writer, Mr. Rubin was in his third year of architectu­re school when he realized that he could achieve in the virtual world what he wanted to do as an architect: create, as he puts it, a “physical space for synchronou­s interactio­ns with humans.”

So began his long quest to find the right design for live video: product by product, pivot by pivot.

Two years ago he landed on the idea for Houseparty, where groups of up to eight friends gather to chat, moving in and out of “rooms” and meeting friends of friends. It has already hosted half a billion chats. The average time spent on the app has gone from zero at launch in September 2016 to 51 minutes a day.

Many teenagers do their homework in there. It is, for the uninitiate­d, like a more casual version of a FaceTime call. Most users are in the US, with the UK in second place.

Mr. Rubin had been searching for “meaningful connection” for people online long before Mark Zuckerberg, Facebook founder, started talking about prioritizi­ng “time well spent” early this year. It worries Mr. Rubin that teenagers are 40% less likely to hang out with their friends in person every day than the same age group just seven years go, according to the book iGen, by psychologi­st Jean Twenge.

“Our kids are going to have the best emoji for conversati­on, but they won’t know how to wink,” he says. “And that’s not the world I want.”

This search for “connection” is his obsession — and it has carried him through making four rounds of lay-offs as he has worked through different launches and ideas, and has pushed him ahead when better-funded rivals copied his products.

“This is how you rally the team, this is what gets me excited, this is why I care about what I do and this is why I’m OK with Facebook and Twitter and whatever shit you throw at me,” he says as he waves his arms about. “I know that we’re working on the most important job for a first-world country.”

Facebook, which is declining in popularity with teenagers (it lost almost 10% of its US users aged 12-17, according to research firm eMarketer), is reported to be working on a new app called Bonfire, leaks of which look similar to Houseparty. Facebook did not respond to a request for comment.

By far the world’s largest social network, Facebook has become expert in lifting features from other apps, most recently adding Stories — photo collection­s lasting 24 hours that were pioneered by Snap — and adding them to every app. The Stories feature on Instagram, which is owned by Facebook, quickly grew more popular than Snapchat.

This is not the first time Mr. Rubin has found Facebook snapping at his heels. Before Houseparty, he and his colleagues founded Meerkat, a live- streaming service that became an overnight sensation in 2015, before Twitter launched Periscope and Facebook introduced Facebook Live.

Celebritie­s quickly adopted the Meerkat platform to reach fans. “It was kind of an avalanche: Jimmy Kimmel, Jimmy Fallon, Ashton Kutcher,” he says. But within three months of its launch Mr. Rubin mentions he could see that this was not the kind of virtual space he wanted to design.

“I had no illusions that this was going to be hard and there is going to be competitio­n from the big guys,” he said. “The feelings that I had then was entirely about ‘this is not going to work to bring the human connection.’”

Live streaming was not as popular as Mr. Rubin hoped it would be, and Meerkat became a broadcast platform for its — often celebrity — users, where most people just watched other people’s content. But, as he says, “99% of the people are not Jimmy Fallons, they don’t have a team of 40 people who [are] working around the clock to create content for 30 minutes.”

Facebook plastered cities with adverts in 2016 suggesting that people stream live from their jog, or to talk about their favorite burrito. “And where is Facebook Live right now?” Mr. Rubin says. From December, Facebook stopped paying publishers to make Facebook Live broadcasts.

Meerkat was pulled from the App Store in September 2016. Mr. Rubin’s team focused instead on developing what would become Houseparty.

He says he followed his heart. To do that, he had to persuade investors, who had only just given him $ 12 million for Meerkat, to back him again. He had to shrink his team quickly, back to a handful of people who could gather around the next drawing board. The strategy paid off, and he raised $52 million in late 2016 in a round led by Sequoia Capital.

Houseparty’s next challenge will be to make money. If it chooses to sell advertisin­g, like all social apps have so far done, the company will be taking on Google and Facebook. It will also have to work out how advertisin­g can avoid intrusion, in a video chat app prized for its “meaningful connection.” Mr. Rubin says he is not yet thinking about how to make money — but he may have decided on a strategy by the end of the year.

For now, he seems far happier than his counterpar­t at Facebook. As Mr. Zuckerberg struggles with the power and influence of his creation, does Mr Rubin have any advice? “No,” he shakes his head. “It’s amazing that a company worth $ 500 billion keeps growing. It doesn’t look like he needs my help.”

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