1. Executive Experience

Guru.Club was founded by Sam and Joe Malone in 2017. The company’s executive team also includes Justin DeVuono as the Chief Operating Officer, Peter Marathas as the Chief Technology Officer, and Jimmy Marshall as the Head of Marketing.

In our view, the professional background of the management team of Guru.Club is largely not applicable to running a tech company in the mar-tech arena. Sam Malone, the Chief Executive Officer and Founder has been an athlete and players representative for an NBA player, but does not have industry experience in marketing or technology.

In our estimation, the team behind Guru.Club holds minimal experience in entrepreneurship, digital marketing, or branding. With minimal industry experience, founding experience or prior exits we worry about the capability of the team to execute.

2. Competition

Upon reviewing its target market, it’s our estimation that Guru.Club faces significant competition from many other startups. While guru.club focuses on letting any shopper become an influencer who can be compensated for their social media posting, competition from general influencer platforms is high. Competitors include the likes of IZEA, Traacker, upfluence and 62 other ‘leading’ platforms.

While guru.club has a slightly unique model with its focus being allowing individual shoppers to post who aren’t traditional ‘influencers,’ there is far too much noise in the space to get excited about this organization becoming a leader. While its channel partner, Shopify is beneficial to hopefully scaling sales it is far from a gaurantee of success. Shopify website users also have access to sign up one of the many influencer marketing platforms out there even if they aren’t a specific channel partner. 

3. Future based on Assumptions

The company is testing the waters as of now, and the future is based on a myriad of assumptions. This is true of any startup. But Guru.Club’s application is not yet launched, relationships have not yet been established, and brands have not yet been contracted.

Based on initial surveys, the company states that more than 100 brands have already expressed interest in collaborating with Guru.Club. Also, of the 1,000 men and women contacted, 97% say they would like to participate in Guru.Club to monetize their social media presence.

We are of the belief that “Talk is cheap.”The transition from intent to the signing of a contract is a long journey, and many dropouts must be expected along the way. The company will need to invest a lot of money in establishing, maintaining, extending, and expanding its business relationships with brands and shoppers.

4. Financial Performance

Since inception, Guru.Club has exhibited meager financial results. To date, over $600,000 has been spent developing Guru.Club without generating any sales.

Moreover, the company reported a net loss of $60,000 in 2017 and $520,000 in 2018. Guru.Club has a negative cash flow, negative income, and practically no revenue. Despite these less-then-stellar results the company  boasts a valuation of more than $12 million, which we think is above fair market value for the progress of the organization to date.

5. Funding Uncertainties

In addition to the above mentioned perils, Guru.Club suffers from the inherent risks of being an early start-up.  There is no guarantee that the company will be able to achieve its strategic goals and objectives. Bringing into question whether or not  investors will earn a resonable return on investment.

Also, the company may not be able to survive competition in the highly competitive market of mobile and online promotions and advertising. Guru.Club also does not have ample funds, and the funds raised through the most recent round of crowdfunding will not be sufficient to sustain its current business plan for long.

Based on the risk factors and drawbacks in the business model of the company, we are assigning Guru.Club an Underweight Rating.

The background and experience of the founding team are unrelated to Guru.Club’s market and does not seem bolstered enough to manuever a relatively saturated market. With minimal funds on hand, and too little accomplished with capital raised to date, we think it can be an uphill battle for this team to raise the necessary capital to sustain moving forward. Lastly, the current valuation well over values what the company has accomplished to date and reduces the upside for investors despite taking on significant risk as an investor with a pre-revenue startup.

All in all, the offerings of Guru.Club fail to stand out in the competitive environment from a business and valuation perspective. Therefore, we advise investors to perform due diligence regarding the potential of the company and return on investment before investing their money.

If you have any questions regarding the underweight rating of Guru.Club, you can reach us at hello@kingscrowd.com.