Earlier this week, it was announced that anonymous social network, Secret, was to shut down over the coming few weeks. Secret allows users to share information with friends and associates without their identity being revealed. On Tuesday, co-founder David Byttow announced that the company was closing down after declining user statistics. People close to the matter, asking to remain anonymous themselves, explained how severance packages were then handed out. This weeks development followed a meeting last summer at Secret's new San Francisco office, where the founders David Byttow and Chrys Bader explained that they had sold their stake in the business. At the time, some Secret employees believed this to be a turning point for the business: of the founders had withdrawn their investment, did this mean they were protecting themselves from the Secret social network failing?
David Byttow wrote a blog yesterday about the decision. In it, he explained: "After a lot of thought and consultation with our board, I've decided to shut down Secret... I believe in failing fast in order to go on and make only new and different mistakes." He said he would wind down Secret over the next few weeks and would return money to investors.
This is quite the change for Secret. The application is only sixteen months old and is part of a family of anonymous sharing applications including Whisper and Yik Yak. The rise from rags to riches, and back again, highlights the nature of Silicon Valley start ups - although Secret's fall from grace has been unusually quick. Secret raised $8.6 million around this time last year from a number of venture capital firms such as Kleiner, Perkins, Caufield & Byers and celebrities including Ashton Kutcher. Casualties include e-commerce business, Fab.com, which at one time was valued at more than $1 billion and had raised more than $150 million before being sold off this year for around $15 million. We've also seen smaller start-up businesses struggle as their turf is invaded by larger competitors, such as live-streaming video application Meerkat, which is having to deal with the entrance of Twitter and Periscope into the same market.
Perhaps one of the reasons why Secret was adopted so quickly by an initial following is because it screened out identity information at a time when anonymous services were very popular in Silicon Valley. But ultimately, how does one market an anonymous social network through viral marketing? One of the founders of Reddit, Alexis Ohanian, said this: "Apps like Secret become an outlet for people to speak honestly about things that would otherwise result in career damage."
Secret serves a purpose, then, but to many it was considered a playground for cyberbullies. Secret installed a community of moderators to control the negative posts but it was not enough to prevent Brazil from banning the app; insiders have stated that the business was not prepared for the flood of negative comments. Perhaps the writing has been on the wall for Secret as in the last six months the majority of Secret's top engineers have moved to other businesses such as Uber, Airbnb and Twitter.