Will Consumers Pay to Use the HalloApp Social Media Platform
May 14, 2022
Neeraj Arora, co-founder of HalloApp, is critical of WhatsApp, Facebook and other social media platforms. “Social media has become the 21st century cigarette,” he writes in a blog post on the HalloApp site. “The more we inhale, the sicker we get.”
You weren’t on social media, Arora, 42-years-old adds, “to see what your friends and family were up to, or have meaningful conversations. You were there to be tricked, triggered, and distracted long enough to sell another dollar of advertising revenue—your emotions manipulated at scale, and your News Feed filled with content you didn’t consent to seeing.”
“Where you hoped to find your friends, instead you found ads, bots, likes, filters, influencers, followers, misinformation, and more,” notes Arora. “Where you hoped to have meaningful conversations, instead you found yourself falling down the rabbit hole of blinking red notifications and an algorithmic feed of meaningless content. Where you hoped for a safe space to keep in touch with your siblings, family members, neighbors, and friends from college, you found content from people you’ve never met before—the whole thing feeling invasive, even creepy.”
In contrast, HalloApp’s “goal is to bring social apps back to basics,” writes Arora. “In society today, phone and video calls are reserved only for close friends and family members” he adds. “On HalloApp, we want people to feel safe, secure, and connected to the people who matter most to them. And the best way to do that is through direct lines of communication—first starting with chat, and then the ability to call someone directly inside the app.”
HalloApp is seeking to attract subscribers, in the intensely competitive social media space, with a unique strategy. Users can only connect with others if they know their phone numbers. Posts are not public and visible only to those in your address book. Posts cannot be reshared or reposted, so they are unlikely to go viral and intrude into other people’s news feeds. News feeds are chronological and designed for the user’s best interests.
Posts disappear after 30 days. Groups are limited to 50 to reduce the chances of HalloApp being misused to spread disinformation and hate. There are no advertisements and no influencers and no revenue generated based on selling personal data like age, gender, location, interests, tastes, likes and dislikes.
HalloApp, based in Palo Alto, California, was founded in 2019 by Neeraj Arora and Michael Donohue. It has 14 employees, according to its LinkedIn page. Earlier, both founders were at WhatsApp: Arora was the Chief Business Officer, from 2011 to 2018, while Donohue was the Engineering Director. Donohue has a B.S. in computer science from Carnegie Mellon.
With more than two billion users worldwide, WhatsApp is the second largest social media platform, after Facebook; both are owned by Meta Platforms, formerly known as Facebook. “Today, I regret” negotiating WhatsApp $22 billion sale to Facebook in 2014, writes Arora in a post on LinkedIn, where he has nearly 13,000 followers.
WhatsApp is “a shadow of the product we poured our hearts into, and wanted to build for the world.” Facebook’s management, Arora thought “believed in” WhatsApp mission of not mining user data and never carrying any advertisements. “Nobody knew in the beginning that Facebook would become a Frankenstein monster that devoured user data and spat out dirty money. We didn’t either,” writes Arora.
Several LinkedIn members commented that they admired Arora’s “courage” in criticizing Facebook. But many also pointed out that the WhatsApp founders, Jan Koum and Brian Acton, ought to have realized that Facebook could not recoup paying $22 billion, in cash and stock, for WhatsApp by merely continuing to charge users $1 to download the app.
Facebook’s primary source of revenue in 2014, when they bought WhatsApp “was ads driven through user data,” commented Tarun Karthikeyan, founder of WatchDeck, a Chennai, India-based app. “Seems to me that they always valued (WhatsApp) only based on the user data to be mined to serve ads.”
WhatsApp founders earned massive financial rewards by selling to Facebook. Koum has a net worth of $10 billion while Acton’s net worth is $3 billion, according to Forbes. While there are no public estimates about Arora’s net worth, he reportedly owned 1% of WhatsApp. So, he likely earned at least $220 million from the sale.
In May 2021, Arora and his wife Sunisha Chandhok paid $22 million in cash to buy a six-bedroom, seven-bathroom, 8,400 square feet mansion in Beverly Hills, California, according to Yahoo.com. Residents in the town, near Los Angeles, include Sandra Bullock and other Hollywood stars, singers Adele and Taylor Swift and other wealthy celebrities and business folk. Arora also owns a $10 million home in Palo Alto, in the center of the Silicon Valley area.
Prior to WhatsApp, Arora worked at Google, including spending four years as Google’s representative on four venture capital funds in India. He also worked at India Times and Accellion. He earned a B.S. in mechanical engineering from the Indian Institute of Technology, Delhi in 2000 and an MBA from the Indian School of Business, Hyderabad, in 2005. In 2017, Arora funded a scholarship at the business school to pay the total costs for one student, which is estimated to be about $50,000 per year.
HalloApp users worldwide can now make free audio and video calls to others on the social media platform, using WiFi and/or cellular data. While offering security and privacy, “HalloApp will never use your personal information or show you ads. Instead, we plan to eventually offer additional features at a small cost,” Arora writes in a company blog post. HalloApp plans to charge a monthly fee, in the range of $1 to $5.
So far, HalloApp has not disclosed the number of users on the platform. Potential users may not want to pay a fee for using HalloApp, especially after decades of using social media for free. They may also be reluctant to use the app, since, if they find the fee that will be charged is too high, they will have to disconnect and rebuild their social network on another platform.
Yet, given its focus on connecting friends and family and emphasis on privacy, HalloApp could attract subscribers, especially in the Western world. In addition, the ability to make free video and chat calls worldwide may attract users in places like India, similar to the initial appeal of WhatsApp. As Arora notes on his LinkedIn post, “For people (like myself) with family in multiple countries, WhatsApp was a way to stay connected—without paying long-distance SMS or calling fees.”
Today, WhatsApp and other social media platforms, which depend on advertising revenue, need hundreds of millions of users to become profitable. In contrast, HalloApp needs only a few million paid users to be a financially successful niche platform. It is hence not surprising that HalloApp has reportedly raised $15 million in funding, including from Sequoia Capital, an early investor in WhatsApp and Instagram, and other venture capital firms.
On a company blog Arora calls “HalloApp the first real-relationship network because there is no algorithm stuck between you and your friends and family.”
For weekly stories follow on: LINKEDIN or TWITTER or FACEBOOK