The explosion of social media has given rise to a new brand of celebrity known as “influencers.” Many influencers take advantage of their internet fame to generate income, and a number of companies have joined hands with these individuals to spread brand awareness. However, the recent risks of fake influencers have given businesses cause to be wary.
Kyndoo has come up with a solution to help both influencers and companies considering influencer marketing. The company has developed a platform that helps real influencers leverage social media’s unstructured data to create effective marketing campaigns. The platform, the Kyndex, works like a credit score for influencers and measures the authenticity of the influencers’ audience. We reached out to co-founder Kelly McDonald to learn about the impact Kyndoo can have in the future and hear her thoughts on the significance of recent crowdfunding legislation as a whole.
Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.
Can you give us a brief elevator pitch for your company?
$15 billion will be spent on influencer marketing in 2021. And more than $5 billion of that will be lost to ineffective and fraudulent influencers. Kyndoo is a predictive intelligence platform for social commerce that takes the guesswork out of influencer marketing campaigns by helping brands vet influencers for authenticity, content safety, and offering “Beyond the swipe attribution” in a cookie-less world.
What inspired you to take the leap and build this company?
As I started researching the problem of influencer fraud, what I found was that there were also so many amazing and great influencers who were being put on a back burner by brand marketers simply because they couldn’t stand out from the sea of terrible influencers. And so many brand marketers who had been burned by #Fakefluencers already were gun-shy to keep paying for their campaigns. I thought, “This is a data problem that if solved could restore trust in an entire industry.” I like solving big problems. And I knew “Restoring Trust” would be a layered challenge that, when achieved, will bring real satisfaction not just to me, but to all the stakeholders involved.
What past experiences prepared you to start, build, and lead your company?
This is the sixth startup that I’ve worked at, and I’ve worn almost every hat there is in an early-stage company. My very first startup — built in college and exited to my university student union — was a textbook exchange platform. Eight years ago, I was working in a data marketing firm (with our now CMO, Amy Romero), and we were leveraging more than 200 lifestyle data points to help financial advisors market to the right potential clients, and that was my first foray into how data can help marketing campaigns. Most recently, prior to starting Kyndoo, I was the senior vice president of revenue, operations, and people at a commercial real estate crowdfunding platform. If there has been a challenge in the early stage, I’ve seen it and personally had a hand in trying to solve it.
And my co-founder, Jin Yu, has similar deep experience. He’s a serial entrepreneur with one exit in the social local mobile space that he sold to Chinese travel giant Mafengwo. He was also the chief architect at Open-X. And when I met him in late 2019, he was leading more than 1,600 engineers at Asia-Info, one of the world’s largest telecommunications companies. You don’t get to lead 1,600 engineers because you went to a good school. You have to be a good leader to make that happen. And Jin is the best technologist I’ve ever worked with in my career.
What is your vision for the future of the industry you are operating in?
As I mentioned before, I think we can really restore the trust in the social commerce industry overall, but what we see long-term for Kyndoo goes far beyond just influencer marketing. Because we are a data company first, we think there are many applications for the use of our products, including underwriting, financial trends, and perhaps even financial products. What we know for sure is that it’s a big blue ocean in terms of companies in our landscape who actually own and acquire their own data. We see this as a huge advantage for us when it comes to our roadmap and revenue channels.
Who is on your team and how did you come together?
I started the journey off as a solo, non-technical founder — non-technical in the sense that I couldn’t code myself, but I had some experience in product management from previous roles. I originally hired an offshore team to build the product that helped me get into 500 Startups. Once I got into 500, I began to look for my co-founder, and that is how I met Jin. Jin and I really hit it off right away and worked together for about four months before he came on officially in April 2020. When he onboarded, he brought in two of his colleagues from his previous exit, and we hit the ground running on our data products. And then, in the late summer of last year, Amy Romero — who I had worked with previously at the data marketing firm — joined us as well to lead our marketing efforts. From there, we’ve grown the team to nine amazing people, including Jin and me. We’re so proud of all they’ve accomplished in the last year and will accomplish in the future.
Do you have any competition, if so, how do you differentiate?
While there is no shortage of competition when it comes to companies working on something to do with influencer marketing, there is really a lack of competition when it comes to companies who have their own data and are working on anything other than workflow tools for a marketplace. In fact, the CEO of a competitor company told me he was “Outcome Agnostic” when it came to the results of his client’s campaigns. And I think that is the real difference between Kyndoo and everyone else in the industry. We are fanatical about the results. Our entire point of existence is to ensure that everyone involved in the campaign sees a positive return on the investment that goes into the campaign. And that means influencers being fairly compensated, brands seeing a conversion rate that outperforms spending, and Kyndoo offering the service at a price point that allows us to grow as well.
What does your business model look like?
Because we are more than a marketplace, we have a few different revenue streams, and as our product line grows, we see opportunities to test different business models out. Our go-to market plan is a “land and expand” method that allows us to work with brands of all sizes and fit into where they need us for the first project. Our most common product is a transactional model that helps brands find, vet, track, and transact with influencers where we take a fee on top of the negotiated terms between the influencer and the brand. We also offer a SaaS product that has a freemium model which helps brands build trusted communities with influencers. And then, we offer some data-as-a-service products that we price per pull for those companies.
What brought you to equity crowdfunding and how do you intend to use the money you raise this round to scale the business?
As someone who was in the industry myself previously, I’ve always wanted to offer a slice of the round to the crowd. I think democratizing the opportunity for investing in early-stage companies is one of the best legislation moves our country has made in recent history. On top of that, as an underrepresented founder, I think it’s extremely important that we look to bring in underrepresented investors into the company as early as possible so that the returns they see will hopefully allow them to fund more underrepresented founders in the future and potentially even at later stages. I think the funding gap in this country isn’t just one-sided, and founders have to do the work too, to find the investors they want to see more of in this world. The retail investor is definitely an underrepresented investor. And crowdfunding means that more people can have a seat at our table. The money we raise in this round will go toward the development of the predictive product and helping scale our business development team and increase our sales.
What do you want potential investors to know about you and/or your company?
Even though it may feel like social media is ingrained into our daily lives because we all have a phone in our pocket and many people spend hours a day on Facebook, Instagram, YouTube, or TikTok, we are still in the infancy of this industry. Kyndoo is developing cutting-edge technology on the frontier of social commerce. It’s one of the reasons we won Innovation of the Year for Media-Tech at the 2021 Mid Atlantic Innovation awards, alongside some of the world’s most innovative companies. Come join us on the journey.
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? have you set any future goals for the company?
In 5-to-10 years, the “Kyndex” will be to the word “influence” as “FICO” is to the words “credit score.” We see no reason we can’t or won’t IPO Kyndoo. As a data platform, we have a lot of opportunities for applications and companies to plug in and predict the outcomes of campaigns. If for some reason we chose to go the acquisition route, I think there would be a lot of options there, too. For example, Nielsen is a 100 plus-year-old company that doesn’t have anything like what we are doing. Or a company like Oracle, which clearly sees the value in influencers, could be another option. For now, though, we are just focusing on the core mission at hand — “Restore Trust in the Social Commerce Industry.” If we keep our eye on that prize, I’m confident that we’ll find the exit path that pays off for all of our stakeholders.
We at KingsCrowd are excited to see where Kelly and her team take the company. Kyndoo is currently raising on Wefunder.