Beacons is raising a Crowd SAFE at a $20 million valuation with 20% discount. This is an enormous valuation for a company at this stage. Beacons has only offered a public product for six months and is only generating $3,900 in monthly recurring revenue at this point. The company does own its proprietary technology, but the tech is arguably quite similar to that of LinkTree or Tap.bio, making it far less valuable than $20 million. However, the discount being offered is attractive for investors. Bringing these factors together, Beacons’ price score is middle of the road.

The world is full of aspiring content creators. There are millions of people, young and old, men and women, in the U.S. and abroad, who dream of making money by posting on TikTok, creating YouTube videos, writing blog posts, etc. According to one source, the digital content creation market was worth about $11 million in 2019 and is predicted to be worth over $32 billion by 2030 with a CAGR of 12% in the decade between now and then. However, Beacons’ potential market is limited significantly by two factors: content creators with a large enough following to actually monetize their influence, and within that set, creators who are willing to pay $10/month for a link in bio tool. It’s difficult to determine exactly how many TikTok and Instagram accounts have more than one million followers, but the number is probably in the hundreds or low thousands. Obviously, creators with less than one million followers are eligible to use Beacons, but their likelihood of actually paying for the service presumably decreases steadily in correlation with the number of followers they have. While Beacons positions itself as the monetization engine for anyone who wants to make money online, in reality Beacons itself will only make money from a select few creators, limiting its obtainable market. However, the CAGR for the overall digital content creation market is significant and could help to create more opportunity for the company. Thus, its market score is slightly above average. 

Beacons was co-founded by four engineers who met while pursuing their PhD or Master’s degrees at Stanford. The company is actively led by three of those four co-founders: Neal Jean (CEO), David Zeng (CTO), and Jesse Zhang (CPO). 

CEO Jean has been an academic for his whole career. He received a BS in Electrical Engineering from the Georgia Institute of Technology, then immediately matriculated at Stanford for a PhD in Electrical Engineering (specializing in machine learning). Jean has published a deep learning paper in Science magazine. CTO Zeng has a similar background. After receiving his BS in Electrical Engineering from the University of Illinois at Urbana-Champaign, he also received a PhD in the same subject from Stanford. His specialty is machine learning for medical imaging. CPO Zhang also has the same background: BS in Electrical Engineering from Tufts, PhD in the same subject from Stanford. His specialty is machine learning in genomics. 

Jean, Zeng, and Zhang are undoubtedly extremely intelligent engineers with top-tier credentials in machine learning. However, they don’t have a specific background in computer science, and it’s not clear how machine learning really factors into Beacons’ product. The company purportedly uses artificial intelligence, but the product doesn’t seem to require it. Additionally, none of Beacons’ co-founders have any experience in business or really any work experience outside of academia. Beacons’ above average team score is primarily bolstered by its co-founders’ strong educational background.

Beacons’ link in bio website product doesn’t seem all that different from LinkTree, Tap.bio, and many more upon first glance. However, Beacons does offer a number of features that are more specifically tailored to creators seeking monetization from their audience. A shoppable TikTok feed is a notable differentiator. Flexible and customizable website elements to collect email addresses, direct links to payment pages, and a mobile-first site editor also stand out. It’s also important to note that Beacons offers the majority of its features for free, while users of LinkTree and other services are greatly limited by those companies’ free plans. Overall, Beacons might seem very similar to competitors on the surface, but creators who are actually comparing each individual tool will likely notice differences that make Beacons a more attractive option. Therefore, Beacons’ differentiation score is its highest. 

Beacons is a very young company. Its link in bio website product was only launched publicly in September 2020, so investors only have six months of data to evaluate. Moreover, Beacons is cagey on the precise details of its progress. Financial data doesn’t include 2020, and statistics on user and monthly recurring revenue (MRR) growth are primarily presented in a month-over-month way that obscures totals from the last six months. Based on what information is available, Beacons is growing at a steady clip. The company receives more than 1,500 signups per day on average, all from organic virality without any paid marketing. Signups apparently total 18,000 daily active users since September. MRR currently stands at a modest $3,900 per month, but somehow the company aggressively predicts generating $100,000 MRR by the end of 2021. Notably absent are statistics on churn and/or subscription upgrade rate. The comparison between 18,000 users and $3,900 MRR implies that the vast majority of these daily signups never pay a monthly subscription. Because all of this data is a bit unclear, and only somewhat impressive, Beacons’ performance score is middling.

Beacons has registered many thousands of new users since its launch in September, but monetization has been slow to pick up. This might confirm the hypothesis that Beacons’ obtainable market — of creators who make enough income to justify paying for a link in bio website — is quite small. It also might be a signal that Beacons’ founding team isn’t particularly business-savvy and should consider rethinking its business model. 

If this trend continues, Beacons’ growth might stall over the coming months. Between a niche market (at least for the paid version of Beacons), founders without any business or entrepreneurship experience, and a business model that seems designed to drive creators to a free plan instead of a paid plan, Beacons might struggle to achieve traction that would justify its enormous valuation.

Beacons is playing in a very competitive market of link in bio website builders, but the product team does seem to have identified several key features that differentiate Beacons from players like LinkTree and Tap.bio. Organic marketing efforts seem to be working. Without a dollar spent on ads or other paid acquisition, Beacons has garnered 18,000 users in six months, a total that will presumably grow dramatically if 1,500 new signups are indeed rolling in each day. 

Beacons’ best chance at success is probably to leverage this early traction into a larger venture capital raise to fund aggressive product expansion and convert more of these users to paying plans. If all goes well, there’s a chance that Beacon can own the niche of mobile-first, customizable website builders specifically tailored for creators and content monetization. Perhaps this would position it for eventual acquisition by one of the content platforms. 

Beacons offers a “link in bio” website builder optimized for creators on the verge of monetizing their following. In a few simple steps on either mobile or desktop, creators can activate Beacons’ free plan and build a customized site that contains all of their revenue channels, allowing their followers to make contributions or buy merchandise in just a few clicks. Beacons offers distinct advantages over existing link in bio competitors and has had some success building a list of 18,000 users with organic virality over the last six months. 

On the other hand, Beacons is raising at an extremely high valuation, and its current progress doesn’t seem to justify the price. Prospective investors should note that the Beacons’ founding team has no business or entrepreneurial experience, which might be one reason why so few of Beacons’ early users are actually paying to use the app. There’s a chance that Beacons overcomes these early negative signals to become a creator economy powerhouse, but at this point it’s really too soon to tell. Therefore, Beacons has been rated a Neutral Deal. 

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.