In 2009 a Russian teenager named Andrey Ternovskiy created random video chat website ChatRoulette, which at its peak in March 2010 attracted 1.8 million unique monthly visitors, but suffered from offensive content. The phenomenon inspired Shawn FanningandSean Parkerto create Airtime, which raised $8.3 million in funding and is rumored to go live soon.
While Airtime engineers are still hacking, 33-year-old Alex Krizhevich and 24-year-old Anton Melnyk from Ukraine built and already launched a video-based social discovery platform called Runfaces in October 2011. Runfaces went viral, reaching 280,000 unique visitors in its first month, mainly in the US.
Introducing video communication into the existing social graph has been done before: SocialEyes was launched as a Facebook app last year, but has pivoted to become a video calling app for Android. Runfaces, which like Airtime was inspired by ChatRoulette, is about social discovery based on interests.
The tag line of Runfaces is ‘real communication in the virtual world’. The users sign up with their own Facebook accounts for authentication reasons (email signup is also possible) and select their interests to start meeting new people in a video format.
Social discovery works through recommendations based on specified interests, direct search, interest groups and random video chat. There is a section called Pulse, which shows a stream of publicly shared video messages as well as YouTube and Vimeo videos. Users interact via video messages and a live video chat.
To deal with adult content the founders rely on Facebook login and moderation. Importing social graph from Facebook helps acquire new users quickly, and sharing recorded video messages via Facebook adds to the viral factor (Twitter sharing is coming soon).
To bootstrap the startup, Krizhevich and Melnyk used proceeds from their respective businesses: Krizhevich runs a creative agency, and has a background in advertising, whilst Melnyk co-founded 12 successful Internet projects. Six people in total are involved in the project.
Runfaces attracted 10,000 new registrations within days after it launched. It went viral, especially in the US states of Kansas and Missouri, where users spent over 1 million minutes video-chatting, recorded over 7 million video messages and subsequently crashed the website.
With these stats the team successfully applied to Eastlabs, the Ukranian accelerator backed by local billionaire Victor Pinchuk, who rebuilt the site on the new technology platform and has just closed a seed funding of $70 000 from EastOne Group. Coincidentally, John Fanning, the uncle of Airtime co-founder and CEO Shawn Fanning, is a mentor at Eastlabs, yet the Runfaces team has not had interactions with him during the accelerator program.
Runfaces members seem to be using the network for meeting new people, sharing music videos, Chinese food cooking tutorials, college advertisement and inevitably dating. According to Krizhevich, artist groups are quite active on the network. Some users have over 1000 friends.
To understand the extent of video used in online dating, I connected with David Evans, who runs the Online Dating Insider blog. Evans does not believe that people are ready to use video in online dating. Besides, it is still difficult to monitor for the prevention of abuse, and otherwise it mostly attract kids with no money. According to Evans, video chats have been used by video-based introduction sites such as WooMe (acquired by Zoosk). Then there is SpeedDate. As far as adult content goes, video introductions have been around for years.
Yet the social video broadcasting appears to be a hot spot. In addition to Google hangouts there is a highly anticipated launch of OnTheAir, which is slowly opening up its private beta. A video messaging application called Tout, favored by celebrities, has been visited by 12 million people in the first year since it launched.
The Runfaces team plans to monetize the service by selling virtual goods, using a freemium model where the invisible status and personalized video player branding will be offered to the premium accounts. It also plans to introduce advertisement and sponsorship.
Before that, the total investment of $140K, including own capital, will not get the company too far, even if it relies heavily on viral marketing. Runfaces is currently fundraising.
This post is written by our regular contributor Natasha Starkell, the CEO of GoalEurope, the outsourcing advisory firm and a publication about outsourcing, innovation and startups in Central and Eastern Europe. Twitter @NatashaStarkell. Gplus.to/natashastarkell.