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Stamped the latest to benefit from pop star’s endorsement… and investment

When it comes to launching an app with a bang, developers have several baskets to put their eggs in. Pray for Apple and Google to feature you on their app stores. Spend a fortune on advertising, mobile or otherwise. Turn to promotional networks that are legit (Free App a Day and its peers) or otherwise (bot farms).

Or call Justin Bieber. Well, his manager Scooter Braun, more likely. Bieber is one of the celebrities whose endorsement – often related to his investment – can drive downloads for an unknown app. But how big is this Bieber Effect really?

Social ratings app Stamped is the latest to benefit, with Business Insider breathlessly claiming over the weekend that “One Little Tweet from Justin Bieber Boosted This New Startup To The Top Of The App Store”.

A tweet from Bieber – “this just happened! CHUCK NORRIS is #STAMPED . lol” with a link to his account on Stamped led to a surge in downloads for the app, sending it into the Top 100 Free Apps chart on the App Store, and the Top 10 in the social networking category – both in the US.

The effect was short-lived. At the time of writing, Stamped has fallen out of the Top 200 Free Apps chart, and has slipped to 28th in the social networking chart.

AppData, which only measures the number of users who connected the Stamped app to their Facebook account, suggests the app jumped from 6,812 monthly active users (MAUs) on 3 August – the day of the tweet – to 7,866 two days later.

Not such a big leap given Bieber’s 26.2m Twitter followers, really.

The Bieber Effect was more in evidence for video-sharing app Viddy, which Bieber adopted in May 2012 – posting a video of himself shirtless at a photo shoot and tweeting the link to his followers. Unsurprisingly, it was quite popular.

Bieber has since attracted 239k unique followers on Viddy, which grew fast to a peak of more than 16m MAUs in July, although it has since been sinking again to its current 8.4m MAUs. More on that later.

What Viddy and Stamped share isn’t just Justin Bieber as a user, but Justin Bieber as an investor. Forbes reported in May that Bieber had already invested in Stamped, with Viddy to come. It also cited Spotify, Tinychat and Sojo Studios as previous investments.

“In a typical Bieber deal he’ll put in about $250,000 at the favorable pricing generally reserved for smart money—the kind of strategic partners that help a company long term. Braun won’t disclose the size of Bieber’s portfolio but says it’s between 2% and 5% of the singer’s net worth. FORBES puts Bieber’s fortune at about $80 million, which translates to somewhere in the ballpark of $3 million in venture investments.”

Bieber certainly isn’t the only example of this. His girlfriend, Selena Gomez, invested in social app Postcard on the Run in November 2011, and Shakira chipped in to Viddy’s last round of funding too. Outside apps, Lady Gaga and her manager Troy Carter invested in social media startup Backplane, and used its platform to build her Little Monsters fan community.

The appeal of pop-star investors is clear for startups: they have money, and they have fanbases and social media profiles big enough – in theory – to help apps cut through the ferocious competition on the app stores.

Savvy managers like Carter and Braun are at the forefront of a growing realisation among top-tier musicians that $250k spent on a promising startup rather than a video / second mansion / inflatable Eiffel Tower for the live show may be money well spent if its ultimate exit is lucrative.

The money aspect is persuasive, but the theory that pop stars can turn an app into a hit through social media alone is less convincing – check those Stamped figures from the last weekend, or Viddy’s ongoing slide.

Entrepreneur and investor Chris Dixon has just published an insightful blog post on why “Ten million users is the new one million users”, giving this advice:

“For consumer startups with non-transactional models (ad-based or unknown business models), you need something closer to 10 million users versus 1 million users to get Series A funded.”

For all Justin Bieber’s social media clout, he’s unlikely to send a startup like Stamped soaring through the 1m users mark, let alone 10m. But hard dollars from he and his fellow stars may at least provide the cushion for startups to develop the features that will make their apps good enough to aim for those targets through organic, word-of-mouth growth.

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