Feature: Can Ottawa build a consumer app with mass appeal?

By Stephen Karmazyn

Social media is big business.

Facebook, Instagram, Snapchat, Pinterest, WhatsApp – all are members of the billion-dollar valuation club. So where does Ottawa’s tech community stand in terms of developing social media platforms and apps with broad consumer interest?

If that question left you scratching your head, consider Bumpn, a new social media app that is setting its sights high.

Geolocation is key to the app, allowing communities to form based on proximity. Think Facebook groups generated by geography.

Aimed at students – ground zero for nearly all social media virality – the app is intended to connect young adults at universities to each other using an interface familiar to the Facebook and Instagram generation.

With 10 schools targeted for its official launch this September and Bumpn ambassadors working to turn the social media platform viral, the local startup has big ambitions.

Already, its prototype has attracted 4,000 users since its launch earlier this summer.

“We actually started off as an event-based sharing app,” says Moe Abbas, chief executive and co-founder of Bumpn. “And we had this cool location piece that let you discover nearby events.”

After talking with users and analyzing data, the company discovered Bumpn’s location piece was a popular social networking tool.

“That’s when we had our ‘aha’ moment,” Abbas says. “We realized that existing social networks were not built around a user’s location. Our mission is to connect communities, and we’re starting with students.”

Based out of Nepean in an open-concept office with a “no-shoes” policy and a barbecue out front, the Bumpn team consists of nine full-time employees and a few interns at any one time. The startup hopes to be the next social media craze to challenge the space’s huge incumbents.  

Calling Ottawa a “city on the rise” but lamenting the lack of venture capital interest and inclination towards low-risk investment, Abbas says he hopes he can bring more attention to the place he has called home most of his life.

Taking advantage of the federal government’s Industrial Research Assistance Program, Bumpn gained partial funding, guidance and a network, three elements he believes are crucial to the survival of any startup.

“We’ve got to figure out how to survive as Ottawa startups,” Abbas says. “Hopefully that survival is in Ottawa. But if that survival is somewhere else … life and death is the ultimate motivator.”

The company is primarily being financed by IRAP, local investors and Michael Dunleavy of the LaBarge Weinstein law firm.

As for overcoming barriers into what is both a lucrative and very difficult market to breach? Mr. Abbas sees one major path.

“Virality with retention is the holy grail for social media applications,” he says.

While Bumpn will initially launch as a free app, Mr. Abbas plans to monetize by selling ad space on the application. Abbas sees three major areas to feature those advertisements: branding the photo filter names, ads put in the community feeds that you follow and featured communities.

Examples of the three ad types would be a photo filter branded with the name of a company – an idea for which Bumpn has a patent pending – along with an ad for a nearby sandwich joint appearing in Carleton University student’s local feed, and a sponsored Red Bull community/event feed.

“Revenue is a derivative of engagement. Once we have mindshare, we can find all sorts of ways of monetizing,” says Abbas.

Umar Ruhi, an assistant professor at the University of Ottawa’s Telfer School of Management, is an expert on social media and e-business.

Ruhi says consumers in the social media space are creatures of habit, something that could pose a huge hurdle for Bumpn.

“From a customer standpoint, the network effects and the switching costs, those are two extreme barriers,” he says. “You need to have a critical mass of customers, and people who are already using these (older) platforms are hesitant to switch.”

Successful competitors to a Facebook or Instagram need to tap into the right technology and the right sociology trend, he explains.

“It sounds a little bit like the check-in apps that we’ve had before. I do see the potential,” he says.

“When it comes to future opportunities, I think there is potential for applications that extend our existing social network.”

And then it all comes back to the ecosystem.

“Canada as a whole is not viewed as being very startup-friendly,” Ruhi says. “We’re doing much better these days, so people are going that route. But at the same time, there are still hurdles to overcome when it comes to finding funding, finding support from the government. We are making progress, but those are types of things you need to do in order to make it to that level where you can challenge some of the market leaders.”

He looks to one of Ottawa’s biggest homegrown tech success stories for signs of hope.

“What Shopify has done in terms of their IPO … that is going to encourage a lot of entrepreneurs,” he says. “Your exit strategy isn’t always to just get acquired. There are other options and here’s a prime example.”

Abbas agrees.

“If we get a couple more unicorns that sprout their heads in Ottawa, it’ll make a huge difference (in the ecosystem),” he says.