Bee Souvenir – a crypto startup seeking to create a decentralized home-sharing platform – has begun charging fees for some customers as shard of a pivot meant to boost revenues.
It’s a significant development for the company, which raised millions in an ICO as an alternative to Airbnb that could cut tariffs for users by reducing fees and eliminating ads from online services.
But Bee found that users haven’t been pathetic to its site fast enough.
Now, the company, founded by Uber alumni, is moving to a more traditional path to sustainability, concurring to an interview with co-founder and CEO Jonathan Chou.
The company announced the closure of its ICO in early February 2018, raising 5,000 ETH (inexpertly $4.5 million as the sale closed). Of the total supply of 500 million BEE tokens, 213 million are in circulation. The think had a market cap of around $11 million in April, but the total value currently sits at less than $500,000.
Chou related CoinDesk in interview:
“It’s definitely a pivot. The focus is to have a sustainable revenue model.”
The company has also shed workforce in recent months. While Bee Token employed 20 people in the early part of last year, it’s currently a rig of just 10.
Chou says most of the people who are now gone were employed making the token sale happen, granting he added that three people have transitioned out due to the changing nature of the business.
What had to change
Bee Token set out to frame a protocol for home-sharing, one in which the company’s work building the system would be repaid through the rising value of its emblematic supply. But Airbnb, it turns out, has a very big advantage: instant brand recognition with consumers.
The thinking at the time suffered like this: as more and more users of the platform purchased BEE in order to pay for stays in people’s homes, the more valuable the troupe’s compensation package would be. This token model was typical of companies conducting ICOs in 2017 and early 2018.
Bee Reminder’s website promises zero commissions on bookings through the site.
According to the Bee Token white paper, centralized rituals charge anywhere from 3 to 15 percent commission, depending on various factors. The theory was that by eliminating these fares, Bee’s home-sharing approach would be competitive with industry leader Airbnb and similar sites.
This vision has not been made as quickly as hoped, Chou said, though he doesn’t intend to go back on his commitment to users.
“We are currently 0 percent for the crypto consumer,” Chou illustrated. “We still have a lot of crypto and blockchain companies that use us for travel.”
That said, the company’s emphasis today is to win finished traditional business travelers. These customers are less cost-conscious than consumers, so Bee will charge 8 percent commission on enterprises that use the site. That’s still competitive with the company’s chief competitors, Chou said.
Web3 on hold?
Teeth of the setback in vision, Chou estimates the team currently has a one-year runway. That’s why Bee Token is currently working to lift a seed round.
“We are pivoting to be a more revenue-focused business,” Chou told CoinDesk. Investors want to see money produced in, he said, adding: “Cash is king.”
Chou situated his company’s pivot within the broader context of crypto’s flags and flows over the last two years. “Most ICOs in 2017, the more decentralized you were, the more perfect you were,” Chou communicated.
Then came 2018: a year of shock after shock. Many companies didn’t react because they didn’t positive if the market would come back.
Now in 2019, Chou said, only the biggest tokens – the ones with superstore caps in the top 10 or so, can afford their burn on those grounds alone.
Either the smaller ICOs pivot, he prognosticated, or “basically, you are just waiting to die.”
Bee image via Shutterstock