After over a year of media silence, Dubsmash unexpectedly entered the spotlight again last week—for reasons far from ideal.
On February 11, The Register reported that hackers stole personal information for a collective 617 million online accounts from sites including Dubsmash, MyFitnessPal, 500px, CoffeeMeetsBagel and Artsy, posting the information for sale on darknet marketplace Dream Market. 161.5 million of those accounts were from Dubsmash users, selling for a total of 0.549 Bitcoin ($1,976) on the market; at least one user has purchased the records since they were first posted in December 2018.
Dubsmash has since notified its users of the breach and published a detailed FAQ on its website.
But the sudden media flurry may have also brought another question to onlookers' minds: What is Dubsmash even doing nowadays?
For a brief clip, Dubsmash was a viral sensation. Founded out of Berlin in 2014 by Jonas Drüppel, Roland Grenke and Daniel Taschik, the app's early incarnation—which allowed users to record selfie lip-sync videos to famous movie quotes and sound bites from across pop culture—was catapulted into the public eye thanks to unofficial endorsements from celebrities like Jimmy Fallon, Rihanna, Evan Rachel Wood and Penelope Cruz.
In August 2015, the company raised a $5.5 million Series A round led by Index Ventures, pouring much of that funding into more than doubling the size of its team to nearly 40 employees. Company-authored blog posts were throwing around astronomical metrics—200 million users, 350 million installs, six billion videos created—to illustrate its alleged growth.
But, as with many other social and video startups, there was virtually no plan on how to follow up and capitalize on their virality as a legitimate business.
“We were just a creator utility, and were struggling to find a daily use case,” Suchit Dash, President of Dubsmash, tells me. “Most of our customers dropped out after 30 days.” The company tells me that retention rates during its peak years in 2015 and 2016 hovered only at around 5%.
Without a proven long-term use case, Dubsmash could only afford to grow so much. Upon announcing its Series B funding round of €9 million ($9.6 million) in November 2016, the company also revealed that it had laid off roughly 20% of its workforce. The following summer, when Dubsmash leadership decided to relocate from Berlin to New York City, they took just five employees with them—an even steeper layoff rate of more than 80%.
Two of Dubsmash’s original co-founders were nowhere to be found during these major transition points. Grenke announced his departure in June 2016, shortly before the company raised its Series B round; former CTO Taschik then departed in February 2017, shortly before Dubsmash moved to New York. “Not all the founders were on board with the same direction for the company, and Jonas [Drüppel] was the driving force behind Dubsmash’s new direction,” Danny Rimer, partner at Index Ventures, tells me. (Neither Grenke nor Taschik responded to a request for comment.)
Once settled in New York, the streamlined company hunkered down and rebuilt their app from scratch, relaunching in October 2018. The new app's target group seems to have downsized as much as the staff behind the scenes—now focusing solely on dance challenges for U.S. teens and millennials, as opposed to lip-syncing at large for an international, all-ages audience.
Dubsmash's UX is also rather stripped down, missing features as basic as commenting and direct messaging—reducing the app's potential stickiness by forcing users to revert to platforms like Instagram and SoundCloud to communicate with each other. The company declined to reveal exact active-user numbers for this article, but claims that there are “more than one million people coming into the app every month"—a significant drop from the 200-million number reported a few years earlier.
But as for the metrics that actually matter in tech, the new Dubsmash is doing much better than expected. For one, retention has improved significantly: around 35% of Dubsmash’s customers now use the app on a daily basis, and monthly and daily user counts have grown by 60% and 163% respectively since October, without any paid user acquisition.
As of press time, the company, which now houses around 15 full-time employees, also ranks among the top 10 entertainment apps in the iOS App Store, ahead of other popular apps like Eventbrite, YouTube TV and HBO NOW. This makes Dubsmash one of the only apps in the world to have started as a category top-10, plummet toward the bottom of the ranks and then slowly crawl its way back up. (Dubsmash’s self-categorization as an “Entertainment” app is likely strategic, as competitors TikTok, Instagram and Triller all sit under the “Photo & Video” category.)
Billboard declared 2018 “the year of the dance challenge,” with A-list artists like Drake, Ciara and BTS actively taking part in viral dance crazes around their catalog. But whether Dubsmash can successfully operationalize dance challenges as a standalone tech product is far from guaranteed, as the landscape is already so saturated with challenge-oriented, short-form video apps.
In particular, a great dance challenge arguably cannot exist without great music—and Dubsmash currently has no deals or partnerships in place with any record labels or distributors. When it comes to short-form video marketing, music executives are already spending much of their mindshare on competitors like TikTok, Instagram, Snapchat and Triller, the majority of which have active licensing deals with major labels. In fact, TikTok, which sits at No. 2 on the iOS App Store in the U.S. and spends as much as a million dollars a day on marketing, has already been referred to by some writers as “Dubsmash 2.0.”
But the revamped Dubsmash team is confident that they can learn from their early mistakes as entrepreneurs and differentiate themselves by positioning their app as a legitimate tastemaking and community platform, instead of as a mere utility. Of course, the task won't be easy.
SO WHAT WENT WRONG?
From its very founding, Dubsmash’s leadership adopted a philosophy of product over everything—for better or for worse.
The company claims never to have spent a dollar on user acquisition in its history, and former employees tell me that digital marketing and external communications consistently took lower priority relative to engineering concerns. Yet, as the Dubsmash team learned the hard way, adhering too strongly to the mentality of “if you build it, they will come” rarely works in the cutthroat world of social media.
“Our biggest takeaway early on is that we didn’t listen to our users,” Drüppel tells me from Dubsmash's New York office, which is currently situated in the Lower East Side location of co-working space The Yard. “We would be in the clouds, thinking the new features we were building and rolling out were amazing, but then they just didn’t work.”
One example of such a failed feature was Dubsmash’s in-app messaging capability, which launched in May 2016 (previously, users could only send Dubsmash videos in messages off-platform) to little fanfare. “Facebook was already so dominant in our users’ networks, it was difficult to get them to switch,” says Dash.
The entire team now commonly uses the phrase “leading from behind" to dictate their product development philosophy of building only what's proven to deliver genuine added value for users.
"It's very clear that there's no correlation between the amount of money you raise and the success of what you create," says Rimer. "It's not about the number of employees you have or the amount of money at your disposal, but really about the quality of the team you have and the level of clarity in terms of what you're trying to deliver."
The fact that the original company was based in Berlin also made it challenging to recruit local staff with the proper experience in building social and video products at scale.
“Germany is renowned for its process-driven, meticulous working style, which is really good for building products like cars and medical equipment,” Tim Specht, the current CTO of Dubsmash, tells me. “But as for being comfortable with pivoting often and making sure you adapt to new user requirements constantly—not just once in a while, but on a weekly basis—I personally believe it’s easier for us to find candidates with that mindset in New York. It’s something people are much more used to here.” Convincing American talent to transfer to Berlin was equally challenging, prompting the company to relocate their offices altogether.
In its founders' minds, Dubsmash's significant international user base also ended up being more of a curse than a blessing. Early Dubsmash users hailed from a diverse range of markets including Brazil, India, Indonesia, Malaysia, Philippines and Russia in addition to the U.S., Germany and the U.K. As recently as summer 2018 (i.e. right ahead of relaunch), the company was looking for a Director of Content and a Partner Operations & Marketing Manager for an alleged new office in Mumbai.
But the team has largely scaled down its efforts since, now focusing solely on U.S. users, and ultimately did not hire anyone to handle international content efforts. “The old Dubsmash lip-syncing product was used very differently in different markets,” says Drüppel. “We decided it would be easier for us to focus on one customer at a time, and then expand from there.”
A lack of focus on music also arguably ended up being a disadvantage for Dubsmash against its early competition.
Musical.ly, the musical lip-syncing app that was founded the same year as Dubsmash, rose much more quickly and sustainably in popularity—in part because of an aggressive influencer-marketing strategy that catapulted young teens like Baby Ariel and Jacob Sartorious to stardom. Valued at some $500 million prior to its acquisition by TikTok, Musical.ly also had licensing deals in place with all major labels and publishers, as well as an integration with Apple Music that allowed the latter's paying subscribers to stream full songs from Apple’s catalog within the Musical.ly app.
Flipagram, founded a year before Dubsmash, also secured licensing deals with all major labels, and raised a $70 million round from the likes of Sequoia and Index Ventures shortly before being bought out by Chinese news aggregation service Toutiao.
In contrast, music accounted only for around 15% to 20% of all content on Dubsmash's platform at its peak—making it difficult for the company to participate officially (read: legally) in a fast-growing market whose value Musical.ly and Flipagram had driven up significantly.
“[Dubsmash] was already infringing on our content, and we were actively engaged with them for a potential deal,” says one former major-label executive, speaking on the condition of anonymity. “But it was going to be a daunting approval process, and they seemed to be going in a direction away from music. As our priorities shifted internally, Dubsmash sort of fell to the bottom of the heap.”
Of course, assuming Dubsmash's new dance-challenge product will rely on sourcing consistent, high-quality music, the company may have to resort to more formal measures and deals to secure their future.
BUILDING A DUBSMASH COMMUNITY FROM SCRATCH ON "SOCIAL 2.0"
In making the case for Dubsmash's future growth, Dash draws a distinction between what he calls “Social 1.0” and “Social 2.0," pointing to evolving relationships between online and offline social networks.
“The early years of social were about taking your offline friends and connecting more deeply online,” says Dash, who notes that Dubsmash users initially connected with other accounts through syncing their address books. “Now, with Social 2.0, teens and younger millennials are connecting online first around shared interests, then becoming close enough friends to begin meeting offline as well. You see this not just on Dubsmash, where our customers are meeting on- and offline around dance challenges, but also through mediums like Fortnite.”
The app's new target demographic is uncharacteristically homogenous: people of color account for nearly 95% of the app's current user base, and the company claims that "25% of black American teens use Dubsmash on a regular basis" (back-of-the-napkin math converts that percentage to around 1.2 million people).
Perhaps the most drastic change between the old and new Dubsmash is that the latter now relies much less on celebrity appeal for user acquisition. Yes, there are certain Instagram accounts like @thereald1.nayah and @chris_gone_crazy that are approaching one million followers solely through posting Dubsmash videos—but both the company and its users are going out of their way to keep their community largely leveled and decentralized.
“I’ll collab and dance with anyone,” Solomon Snowden, a power Dubsmash user with over 19,000 Instagram followers, tells me. “It doesn’t matter how many followers you have or any of that—it’s all about the love of dance. If people need help learning moves, I’ll even FaceTime with them and help them train and prepare properly. It’s always important to give back to the scene and to the youth. If no one’s helping them, then once everyone gets old, what kind of scene are we going to have?”
Dubsmash's Global Head of Content Barrie Segal works with a team of 10 full-time and contracted employees to track and engage with community members, often private-messaging with them directly on Instagram and other platforms. Dubsmash's official Instagram account also regularly dedicates entire video compilations to Dubsmash users who either just joined the app or have fewer than 10,000 followers.
One of Segal's core strategies in community engagement is helping power users navigate the chaotic world of influencer marketing as businesses and brands in their own right. “There are a lot of teens creating content who might be tech savvy, but are still learning the business savvy,” Segal, who occasionally commissions Dubsmash users to record dance videos for a small fee, tells me.
“When we asked some of our users how much they wanted to charge us for commissions, they responded, ‘Um, what would I charge you if I charged you?’ and I was like, 'You set the price,'" says Segal. "When I told another user that they should post their commissioned video with a caption like ‘Thank you Dubsmash for commissioning this edit,’ he was like, ‘Why would I do that?’ And I was like, ‘Because then other people will want to give you business!’ We’re trying to set an example of what it’s like to work with a big brand. When Sprite knocks on your door and say they want to do a commercial, we want to make sure you have the vocabulary and tools to handle that. That’s something I would like us to keep as one of the tenets of our community strategy.”
LIKE SOUNDCLOUD, BUT FOR DANCE CHALLENGES
On the music side, Dubsmash is trying to position itself not just as a content utility, but also as a tastemaking platform—like SoundCloud for the dancer set.
“The community that exists on Dubsmash is very much ground zero for a lot of trends around dance,” says Dash. “We see a lot of instances where the core germ of an idea happens on Dubsmash first, and then starts to permeate elsewhere. To have access to and continue to grow that community is so critical.”
Interestingly, competitor Triller has also been positioned as the next short-form video app for underground music discovery—“good for hip-hop fans who want something more underground than RapCaviar but less tedious than sifting through WorldStarHipHop clips,” according to Pitchfork. But unlike Triller and TikTok, which immediately land users in a video feed upon opening their apps, Dubsmash instead lands users into a bank of sounds first, in an attempt to put music front and center.
Some artists and producers like CalBoy and LightSkinKeisha have had their music go semi-viral on Dubsmash beyond their control, but there is also a growing cohort of Dubsmash-native dancers who are producing their own music for the first time and feeding it through the app, to impressive results.
For instance, dancer Lil Zachty first introduced his song "Feisty" through Dubsmash videos; the lyric video on YouTube now has over one million views. Similarly, longtime Dubsmash dancer-producer Roscoe Sushii (who has his own dedicated playlist on the app homepage) just hit one million total views on his SoundCloud profile, all thanks to posting calls to action on Dubsmash and Instagram to follow his SoundCloud account.
"What's great about Dubsmash is that I can click on one of the sounds I upload and actually see who's interacting with them—who's making dance videos to my music and sharing it—more easily than on any other site," Roscoe tells me.
Dubsmash has upcoming plans to cater more to its producer community, including better attribution and analytics as well as a dedicated "Producer Specials" playlist.
But reading between the lines, this still leaves Dubsmash potentially liable for copyright infringement claims. For instance, the current “Producer Specials” playlist features excerpts of user-generated, self-uploaded remixes of popular songs by Michael Jackson, Travis Scott and Cardi B, which technically violates Dubsmash's terms of service if those users don’t own the proper licenses.
Addressing this potential content risk, Dash claims that Dubsmash is “not even close to a streaming service where you can listen to full tracks. Every sound on our platform is 10 seconds or less. It’s a transformative service that allows users to actually show their appreciation and express their love for an artist or piece of content, and there are huge benefits and opportunities for the [music] industry that we’d love to work with.”
Yet even more fully licensed platforms like TikTok (which also allow users to upload their own audio) continue to face backlash from the independent artist community for lack of payment, despite their service being equally "transformative."
“The number of seconds doesn’t matter in a company’s ability to claim fair use,” a major-label executive tells me. “Dubsmash still has that liability—and because of their past as an infringing service, there may be some risk investors have to endure if the music industry or an individual company were ever to take action against them. Not that we would care to in this case, because the scale is just not of great importance to us yet.”
All in all, one could argue that Dubsmash's leadership in catering to the niche customer base of young dancers is serving the company well, with regards to user retention and community development. The company has also maintained relationships with all of its investors from its Series B funding round.
An actual business model for Dubsmash, however, is still up in the air. "We’re still in the phase of evaluating how best to monetize," says Drüppel, noting that the company has been looking into in-app tipping and micropayments as a possible path forward. "It’s still early for us, as we’re mostly focusing on building a retaining product."
(Interestingly, this was nearly the exact same language that co-founder Grenke used in 2015, when he told TechCrunch that while there were “multiple opportunities for monetization in the future,” the company remained “100 percent focused on the user as we work on user engagement and retention.”)
Music-industry experts also caution that in the competitive world of social media, focusing on just one singular use case can have ultimately detrimental effects, as predecessors have shown.
"While I believe in niche products going after niche communities, I don't know how a standalone challenge app will survive in a world where major social platforms already control everyone's social graphs," says one label exec. "Aside from TikTok, so many of these apps including Dubsmash and Triller are still primarily tools and utilities. The fate of every tool and utility is to get replaced by the next buzzy one, or to get cannibalized by a bigger platform."
In the future—well aware that even the best dance-challenge product may eventually hit a ceiling—Dubsmash’s execs do have the ambition to expand their app into the wider world of “pop culture challenges,” in the vein of the Ice Bucket Challenge and the Mannequin Challenge. They just need to prove their long-term worth to their current users first.
“[Dubsmash] is incredibly resilient and creative, and there are very strong signs of validation for their new product. But the founders are also quite realistic about the challenges that lay ahead in what they’re trying to do, and are taking it in stride," says Rimer. "They're far from doing a victory lap."
