The beginning of the end for anonymous apps

Secret has announced that is shutting down. David Byttow, co-founder of Secret, wrote on Medium:

“UNFORTUNATELY, SECRET DOES NOT REPRESENT THE VISION I HAD WHEN STARTING THE COMPANY, SO I BELIEVE IT’S THE RIGHT DECISION FOR MYSELF, OUR INVESTORS AND OUR TEAM.”

Secret first raised $1.4 million in a December 2013 seed round that included KPC&B and Google Ventures. This was followed by two rounds of funding that added new investors including celebrities like Joe Montana and Ashton Kutcher.

In the past year and a half, Secret and similar apps like Whisper and Yik Yak have created a lot of attention around the renewed idea of anonymity online — especially in tech and journalism circles. Secret’s $35 million in funding is significant, even if lower than that of Whisper ($61M) and Yik Yak ($70M). All three apps benefitted from clear traction in terms of user engagement, but none presented a clear path to monetization.

Other social apps that created similar levels of tech media attention in the past — SXSW darlings, if you will — have successfully exited via acquisition (think Gowalla and Glancee acquihired Facebook). Secret did not have an exit of this sort. Instead, the app boasting over 15 million users at some point has decided to call it quits. Rather than attempting a pivot, the money that’s left is going back to investors. David has offered to continue writing “postmortems” about the 16 month journey of Secret and it will be interesting to see what former employees and investors also have to say on the matter.

SO WHAT DOES THIS MEAN FOR ANONYMOUS APPS?

The popularity of anonymous and “dark” apps in the past couple of years has raised important questions about the future of the web, and the role of privacy and identity in a world in which everyone has a Facebook and/or a Google account. Many have made the case for the importance of online spaces where people can be themselves, anonymously. Secret’s tagline “Speak freely” clearly pursued positioning itself as a place to speak your mind.

Unfortunately, free speech coupled with anonymity does not create a great business model. From bullying to “leaked” information, Secret and its competitors stirred much debate. While debate and controversy has been fantastic for social apps like Snapchat, this is not the case for anonymous apps without potential for revenue generation. While some marketers — mostly in the entertainment industry — have attempted to leverage anonymous apps for marketing, such attempts have not been more than tests and PR stunts.

Anonymity has always created challenges for startups. 4chan, a website that thrives on anonymity and free expression was recently abandoned by its founder — and is now run by passionate volunteers. 4chan is a simple site, created by a 15 year old who went on to “administer” it for over a decade. On the other hand, Secret was created by someone with real world experience at companies like Google and Square — and with a lot of pressure from investors. Secret’s popularity rose nearly as quickly as it faded away. Needless to say, and sadly for the people who built and used it, it will not be run by volunteers.

There will always be a place for anonymity on the Internet. An important place, I hope. That being said, the challenges are gargantuan for apps who raised a lot of money without a clear monetization plan. Anonymity is not going anywhere, but the recent wave of anonymous apps is at a crossroads. Over the next year or so, we’ll see whether apps like Yik Yak, After School and Whisper will pivot, persevere or disappear.

Note: This article was originally published on Social Nerdia.