Sarahah — Time to change its business model?

Sarahah currently doesn’t have a business model that generates a steady revenue. The idea came from solving a problem where getting honest feedback was difficult. And the founder wanted to solve this problem by creating a platform where honest feedback about managers and bosses can be given by subordinates without the threat of revealing the identity. Soon it gained popularity among general public and mid-2017 it topped the charts of iPhone’s app store downloads even though was no explicit marketing done by the company. All the popularity it gained is when Snapchat added a new feature to add links to snaps. People added links to their Sarahah profile seeking feedback and shared the positive feedback they got again on Snapchat. This loop did all the magic. It became famous through word of mouth. The main reason for its success till now is that it catered to the need of almost everyone, to know what others have to say honestly about them. There were some products like Yikyak that were in the market before Sarahah. Yikyak catered to college students to facilitate gossip in the college. But soon it faced problems similar to Sararah and had to shut down in early 2017.

Sarahah does not have a specific target customer base in particular. The product is very generic with few features and caters to the masses. The main reason for the success among general public is its idea of getting to know what other people think of them. But the same curiosity has a very short life. A lot of people would get their feedback in the first few messages and there would be nothing new the customer can expect from it. Soon the customer loses interest and slowly fades away. The second major issue is with anonymity. The idea is built upon the idea of anonymity but that same characteristic has a big baggage of cyber-bullying that comes with it. This is an opportunity for people to hide behind their screens and hurl at others without fear of getting caught. This is the same case as Yikyak that was mentioned earlier. The students when started hearing negative gossip on this platform soon feels negative about it. It doesn’t take much time for them to uninstall the app from their phones. The interest in the app/product would decrease exponentially with every negative/nonconstructive message received. These customers fade away faster that the first group. The third scenario is when people totally stop getting new messages or keep getting those boring positive ones which adds no interest or value to the user. This is going to lose the customer slowly but ti is going to lose. With these scenarios it just has to experience a slow death like others in the past.

To succeed in the business, first appropriate target audience have to be figured out. The product is generic and targets everyone currently where mostly utility products have such segmentation with high competition. Firstly, those areas where anonymity is important is to be identified. For example, social research organizations which require high level of anonymity to be able to get honest data in the research. The requirements of a social research organization are to be gauged and the product has to include those features like questionnaire building, quantitative analytical tools, survey tools. Currently the product is very simple in terms of technology and it gained fame because this is one of the first ones to foray in this field. The product has to be more sophisticated and feature driven to increase the barriers to entry. After the product changes pricing analysis has to be done to generate a steady revenue. Starting by studying the willingness to pay by these companies for such a product. It should adopt a B2B model rather than B2C.

After pricing, a strong promotional campaign is important to reach out to potential customers. It helps in making the product familiar in the relevant circles which makes selling the product easier. It could be divided into two phases. Pre-lauch and post-launch. The pre-launch strategy should focus on making the product familiar with the masses. Even though it is a B2B model, the Market research organizations will ultimately go to their customers to gather data and conduct research. These customers should be able to feel the trust in the product for the research organizations to buy this product. The pre-launch strategy is just what Sarahah did currently. Sarahah became a well noted name among the masses for its anonymity. This image can be leveraged to marketing the product to businesses. Post launch the marketing should be towards both businesses this product is to cater and those customers of these businesses. However mostly the focus has to be on the target businesses. It should highlight on the shortcomings of current methods, ease of data collection, inbuilt features like data analytical tools that will be helpful to the researchers. All in all, its time Sarahah gave a serious thought if it did not already.