The Perils of Faking User Growth: Lessons from IRL’s Rise and Fall
The phrase “Fake it till you make it” is commonly used in the world of software engineering, often embraced by new entrepreneurs and startups. It suggests projecting confidence and success even before achieving it. However, the recent demise of IRL, a promising social app, serves as a stark reminder of the consequences of fabricating user growth. This article explores the rise and fall of IRL, highlighting the risks associated with creating fake user bases and emphasizing the importance of genuine user acquisition.
IRL’s Ambitious Vision:
IRL, a startup that aimed to connect Gen Z users, secured a significant investment of $200 million from major world banks. Positioned as a new Instagram-like platform, IRL garnered attention by promising to provide an alternative event organizing platform for Gen Z, who were gradually moving away from Facebook. The company’s popularity soared with reported user numbers reaching 20 million and then 12 million.
The Fatal Flaw: Fabricated User Base:
However, a shocking revelation emerged from an internal investigation conducted by IRL’s board of directors. It was discovered that 95% of the reported 20 million users were either automated or generated by bots. Consequently, despite the substantial investment raised, IRL is now faced with the unfortunate reality of shutting down.
Internal Challenges and Layoffs:
Internally, IRL encountered various obstacles that ultimately contributed to its downfall. In a surprising turn of events, the company laid off approximately 25% of its team, amounting to around 25 employees. This decision was particularly unexpected as IRL had significantly expanded its workforce in the preceding year. Former CEO and founder, Abraham Shafi, attempted to rally the remaining employees, urging them to adapt and be disciplined while drawing analogies to WhatsApp’s remarkable growth with a lean team.
Investigations and Management Changes:
Doubts regarding IRL’s user base emerged among employees, coinciding with an investigation launched by the Securities and Exchange Commission (SEC) into potential violations of securities laws. Subsequently, IRL’s board of directors suspended Shafi from his position as CEO and appointed an acting CEO.
The Price of Deception:
The downfall of IRL serves as a stark reminder of the risks associated with fabricating user growth. While some startups may resort to creating fake users, the consequences of such practices can be severe. Engaging in deceptive tactics can lead to legal repercussions and damage a company’s reputation irreparably.
The Importance of Genuine User Acquisition:
Amidst the allure of quick success and financial gains, it is crucial to prioritize building a genuine user base. While securing funding, developing an application, and marketing it may seem relatively straightforward, the ultimate challenge lies in attracting real users. Genuine user acquisition is the cornerstone of sustainable success in the world of application and platform development.
Conclusion:
The rise and fall of IRL serves as a cautionary tale, highlighting the dangers of fabricating user growth. The consequences faced by the company underscore the importance of integrity, transparency, and ethical practices within the software engineering community. Startups should prioritize building genuine user bases over short-term gains, recognizing that long-term success stems from authentic user engagement and a commitment to delivering value.
This is from code reporting and With that, we will see you next time.❤️❤️
Credit:
This article was written by Abdul Rafay and published on Future Insight.
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Supporting Materials
Here are all of the links and references that I used to write this blog, so feel free to visit them to get some more help.
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