MeWe Billed Itself as the Anti-Facebook. Now It's Going Hollywood.
The new chief executive of MeWe, the social network that billed itself the anti-Facebook, wants to lure in Hollywood talent — and is eyeing advertisers.
The move, steered by veteran tech and Hollywood executive Jeffrey Edell, is a departure for the Los Angeles company, which promises users it'll protect their privacy and prohibit manipulative algorithms with an ad-free network.
"I want to stay true to the privacy and those efforts, but I don't think it makes sense personally to be the quote anti-Facebook publicly," said Edell, who most recently was president of the entertainment and licensing company WTG Enterprises.
MeWe chief executive Jeffrey Edell
Since replacing founder Mark Weinstein — now the company's "chief evangelist" — last week as the network's chief executive, Edell has already signed on the comic duo Cheech Marin and Tommy Chong, better known as Cheech & Chong, to help promote the site.
"What I want to do is make the experience at MeWe an experience of chat and socializing around content, whether it be voice content like music or content that you would see documentaries, niche-based content, things like that," Edell said. "It would be really cool to have the ability to Chromecast or Rokucast, if you will, content that we would licensed or in our control and be able to have chat groups and socialize in and around that content."
The former chairman of Intermix Media, the parent company of MySpace, and a longtime executive for media distribution and licensing companies, Edell said he will use his Hollywood connections to build up partnerships. He noted that MeWe is already in talks with A-level talent.
About 17 million users are signed up worldwide for the free version of MeWe, about half in North America. The Culver City-based site appealed to some of those users by selling itself as privacy focused, with a "Privacy Bill of Rights" that vowed not to manipulate, filter or change newsfeeds or use facial recognition technology.
It kept those protections.
Unlike Facebook or Twitter, MeWe's revenue comes from subscribers who pay a monthly or annual fee to talk with a camera, access private chat rooms and get free emojis and other perks. Weinstein told dot.LA in March that the social platform makes $1 million each month from those subscribers alone.
Weinstein wouldn't disclose how many users pay for their accounts, but said 95% use the free version. MeWe has raised about $24 million from "high net-worth individuals," Edell said. And it's seeking another $20 million of funding from venture firms as it looks forward to creating new offices in a post-pandemic world.
Edell vowed to "stay true to the concept of privacy and security and protection of people's personal information." But, he says, he's open to partnering with advertisers to "give people the opportunity to make choices of what it is they want to see, listen to and do."
Until recently, the social network has relied on users' discontent with big social networks like Facebook to grow its base. When Facebook rolled out new WhatsApp privacy policies in January, upset users flocked to MeWe. The site gained 2.5 million users in one week. Some observers said it became a haven for anti-vaxxers and extremists.
Edell wants the site to appeal to users widely and while continuing to moderate content, although he didn't say how.
"If you're going to have crazy theories, again as long as you're not damaging to people, you're not pointing a gun at Obama's head, you're not raiding the Capitol to get to Nancy Pelosi... then a person should be available to be as silly as they want and they can not make sense or make sense, just don't cross the line," he said.
"The subscription model is going to stay," Edell said. "And there won't be a situation where I know exactly how you behave, so I send you an advertisement to buy Nike shoes and get creepy like that, but I'm thinking there has to be a way – as we move towards the future – to give you the option to figure out what it is you want, and then give you a place within the platform you can go and get it," he said.
For instance, he said, members might be able to opt into stores or groups with advertisers. That strategy will be key, he said, if it's to make a dent in Hollywood, where studios and talent alike depend on social media.
"We just have to be more sensitive towards the entertainment community and the people that are going to be on that platform and not create conflict," he said. "That doesn't mean we still can't be different."
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"Diversity is an interesting thing in this country because it tends to be important for a moment in time and then it becomes less important again," Nichols said. "This time around it feels a little bit different. It feels like people are genuinely realizing that there's a systemic problem. These aren't one-off occurrences. Things aren't equal."
On Wednesday, Nichols got a boost from the trade group that puts on the Las Vegas' Consumer Electronics Show (CES). The Consumer Technology Association announced that it would invest an undisclosed amount in MaC Venture Capital, as part of its $10 million diversity effort.
Nichols, a founding manager partner of the Los Angeles firm — which was created from the merger of Cross Culture Ventures and M Ventures — said the investment is significant given that venture funds led by women or people of color are mostly underfunded.
MaC Venture Capital's Marlon Nichols
Although the cash is not much more than an institutional investment, it marks a partnership between the trade giant and the up-and-coming firm, as venture capitalists and the tech industry struggle to overturn decades of institutional racism. Last month, another trade group, the National Venture Capital Association, launched a $5.5 million nonprofit dubbed Venture Forward, aimed at diversifying its ranks.
"The amount of funding that goes to black and brown entrepreneurs, we are talking about one percent," Nichols said.
The problem, Nichols said, stems from the lack of diversity in venture capital where investors tend to bet on people that look like them and have shared experiences. According to a survey by the NVCA, about 3% of investors are Black, though the numbers are likely much smaller.
Launched last year, MaC has already invested in nine companies and with its inaugural fund aims to seed about 40 companies with funds of $500,000 to $1.5 million. Its focus on pre-seed and seed rounds is an acknowledgement that the initial round of funding is most difficult for founders of color to raise — in part, he said, because the bar is often higher for them.
Yet, diverse founders often give back greater returns and raise more money in subsequent rounds, said Nichols, who co-authored a study by the Kauffman Fellows Research Center that analyzed the profile images of more than 260,000 startup founders and executives in the United States using publicly available demographic models.
"Founders of color that were successful raising capital in the early days, they raise significantly more money than all white teams in later rounds because the bar is so much higher in the early days," he said. "That's where the absence of capital is. Once they get beyond this stage there are tons of data that shows that they outperform and at that point it is solely based on merit.
"It's in the early days when you're still more betting on the idea, and proposition of the market, and the team where we're seeing that huge disparity," he said.
MaC is the fifth fund CTA has invested in as part of its commitment to venture firms and founders that invest in women, people of color and other diversity. Last year, it announced that it invested an undisclosed amount in Harlem Capital Partners, SoGal Ventures, Rethink Impact and Founders First Capital Partners.
MaC's portfolio includes more than 100 companies and several significant exits including Gimlet, which was sold to Spotify for $230 million. The other managing partner is former Washington D.C. mayor and special advisor at Andreessen Horowitz, Adrian Fenty.
"We are putting money in the hands of venture funds whose investment thesis is to focus on women and entrepreneur because they are traditionally underrepresented," said Tiffany Moore, an executive with the trade association. CTA developed the idea in 2018 and the money comes from its own budget. That year, CTA made $126 million in revenue.
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Photo Courtesy of Canoo
Under the arrangement, the electric car maker Canoo will develop a platform similar to the one it designed for its yet-to-be-manufactured vehicle for Hyundai and Kia cars.
The so-called "skateboard design "places the components of the electric powertrain on a flatbed with wheels underneath the car much like a trailer allowing for more room inside the vehicle. Hyundai said the design will also make their electric vehicles more cost competitive.
"We were highly impressed by the speed and efficiency in which Canoo developed their innovative EV architecture, making them the perfect engineering partner for us as we transition to become a frontrunner in the future mobility industry," said Albert Biermann, Head of Research & Development, Hyundai Motor Group in a statement announcing the deal. The company is developing the a Hyundai platform that is "autonomous ready and suitable for mass adoption," he said.
Unlike traditional engines made for specific cars or trucks the skateboard allows for different car bodies to be placed atop, making it interchangeable. But the agreement does not include manufacturing of the vehicle.
Photo Courtesy of Canoo
Carmakers are ramping up capital spending on electrification as more consumers warm up to the idea. BMW, Mercedes-Benz, Porsche and have announced EV models set to launch in early 2020s. Last year, Ford announced it would invest $11 billion in electric vehicles. And Hyundai has committed to spend $52 billion in future technologies through 2025, while Kia will invest $25 billion in electrification and future mobility technologies. Hyundai Motor Group wants a quarter of their car sales to come from their green fleet.
That's good news for electric vehicle startups, which often face an uphill battle because of the high cost of capital, said Asad Hussain, an analyst at Pitchbook. "You really do need corporate partners to finance your growth and expansion and if you can get an automaker on board, you can leverage the amount of capital and their technical expertise."
Canoo, founded in 2017, by two former BMW executives, opened up a waitlist last month for their eponymous prototype vehicle — a futuristic looking minivan — that it will offer to drivers as a subscription service. The service is set to launch during the second half of next year in Los Angeles.
"We have been working diligently to develop a bold new electric vehicles and partnering with a global leader like Hyundai is a validating moment for our young company," said Canoo chief executive Ulrich Kranz in a statement.
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