Klout Scores! How They Influenced Their Way to $8.5 Million in Funding

It’s hard for startups with a clear revenue plan to get funding. Those who do not have one are often left running their sites out of pocket. From time to time, startups pop up that hit a tipping point with their service in a way that makes investors curious.

Such is the case for Klout.

Today they announced receiving $8.5 million in funding. The revenue model is currently non-existent. That’s how they like it and it’s a good part of their success. It’s the classic prove-value-now-and-figure-out-revenue-later mentality that takes so many down the wrong path. Klout appears to be different for several reasons…

They Aren’t The First, Just The Best

There have been many attempts to index and rank social media account power, particularly in Twitter. What separates Klout from the competition is their ability to gauge realistic “influence” by looking at everything from a well-conceived algorithm. It’s one that isn’t fooled by bulk, as the example above depicts.

Just because the top account has 80% more followers and 4.5X higher “True Reach” its score is much lower than the person below.

A Good API Brings The Love

When a startup has over 1,250 other startups using their API, people start watching. You start to go from being a service to being an indicator. From indicator, the goal is to move up to become “the standard”. Just as PageRank (overdue as it is for an update) is the standard for understanding a website’s importance, so too can Klout become the social influence indicator.

Their API is used by many popular services including HootSuite, Flowtown, and Tweetup. The more that companies start using it, the more that other companies will have to start using it. Klout is not too far from reaching an “API Tipping Point” where they go from a consideration to a must-have for new and existing programs and services.

Data Presentation is Gold

Data is the most important asset a service such as Klout has. While others have collected more data than Klout, few if any have been able to break it down and present it in a way that people and businesses can use.

In the case of Klout, the presentation is amazing. Being able to see the various aspects of what is considered “influence” gives people a way to understand and improve their activities. Classifications from “Explorer” to “Celebrity” give Klout and the people who use it a way to tie a social media personality in with the rankings.

For business, it helps companies find influencers. All tweets are not created equal. Some have more weight. The word of one person will have more or less exposure and engagement than the word of another on social media. Klout quantifies influence in a way that, thusfar, seems to be much more accurate than those who have tried in the past.

The Secret To Success: Surgically-Induced Immersion With A Product

This episode of TodayILearned is brought to you by Gigaom: “Klout started out focusing on Twitter, after founder and CEO Joe Fernandez had jaw surgery and spent his recovery posting on the social network and trying to figure out who to follow.”

It just goes to show that if you want to do something, creating a need is often the best way to get there.

JD Rucker

+JD Rucker is Editor at Soshable, a Social Media Marketing Blog. He is a Christian, a husband, a father, and founder of Dealer Authority. He drinks a lot of coffee, usually in the form of a 5-shot espresso over ice. Find him on Twitter, Facebook, and Pinterest.

9 thoughts on “Klout Scores! How They Influenced Their Way to $8.5 Million in Funding

  1. What are the common symbols of authority or clout that we see online as against those in the real world: http://trailofpapercuts.wordpress.com/2011/01/07/signifiers-of-power-and-authority-in-cyberspace/

  2. Klout is a great example of everything that is wrong about Twitter: it gives you back a number that you can compare against other users based on the principle that any number on Twitter actually means a thing when it doesn’t.
    The system used by Klout to generate the score is full of holes as I myself had the chance to tell Klout’s CEO. His answer? We are working on it but nothing changed. The news of this funding make me believe that we have now reached the era of vapourware 2.0.

  3. Klout is a load of crap. The scores are so far off base. I manage brands (dozens of them) and I track and watch not only the brands we manage but all competitors. We track over 50 KPIs and there is no rhyme or reason to some of the Klout movement explainable by anything other than flaws in their algorithm.

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